Will LIC Activism Upend Aussie Funds Management? (WAM Interview)

Will LIC Activism Upend Aussie Funds Management? (WAM Interview)

righto buddy MERS old JD is gone over to
Sydney on a little quick trip and
interviewed the some of the big money
over there pretty wellknown name this
one JD sure is uh this one’s all down to
to trav’s tweeting it’s it’s bearing it
fruits so people might have seen that Mr
Jeff Wilson the founder of Wilson Asset
Management commonly referred to as Wham
has gotten pretty active on Twitter
himself he must have seen what Trav was
doing and got a got a bit of an ite for
it so yeah a couple couple tweets later
I’m flying up for the a day trip up to
Sydney to sit down with Jeff Wilson and
Cooper Rogers so we spoke about the
macro Jeffs has come back from uh the
states spoke about the US China a bunch
about Commodities a good f for the
listed Investment Company structure that
we see in Australia it’s a pretty common
way for these funds that we speak with
quite regularly and that we interview
Maddie to structure their funds so that
people can buy and sell them on the ETFs
so a bit of a different tack to some of
the people we’ve spoken with in the past
but I think it was well worth the trip
mate yeah the you’ll hear the word lick
uh that’s the short name for these
listed investment companies so we have
we haven’t talked heaps about them like
so I’ll get for the money miners out
there I suppose how they’re different to
a fund like when we chat to a a rusty or
a Cav or something like that that have
got a fund like the funds are trust
these licks are a they’re a company and
they trade so they can you know hold
money in the company and smooth out
dividends instead of having to
distribute it every year like a trust so
but it trades as a security on on the
ISX or wherever they have these licks so
exactly and you hear you hear them
talking about NTA so that’s the net
tangible assets so it’s like talking
about the whether it’s trading to at a
premium or a discount to the NTA of what
it holds so absolutely plenty plenty has
been sort of fleshed out about these
vehicles and a lots of people have
different views on on their place in the
market and whatnot but we’ll let the
money miners get their take and we touch
on the the recent trend for a few of
these things trading at discount
throughout the interview but yeah
there’s a there’s a good bit to learn
from this one I reckon yeah and I guess
I had obviously had to listen before we
did this J I found found it very
interesting like talking you know as we
said it’s B it’s the it’s the big money
in Sydney like worms are pretty um
decent sized player over there but you
know what I guess what I came out out of
it is like investing is just one part of
what these licks and these these bigger
organizations do it’s shareholder
engagement and the marketing of their
business is such a big part as well in
addition to invest in the coin so making
sure the the you know because a lot of
you know retirees and that are whole
whole other shareholders in these licks
absolutely mate 20 26 years later since
Jeff started the business and that
shareholder engagement is obviously at
the Forefront of their strategy very
very it was funny when they were talking
about um Firefly uh draw draw a lot of
parallels there it’s like a lot of their
big names they have a following and that
is how they get sort of the that’s one
reason they get the capital behind them
as well so anyway have have a list of
money miners uh yeah thanks thanks to
the the boys at Wilson for coming on
appreciate it so right here we go g
money miners we’ve got a couple guests
here today Jeff Wilson and Cooper Rogers
from Wilson Wilson Asset Management
thanks for joining me guys no worries
pleasure good to be here JD so Jeff
there’s um there’s only one place to
start this conversation I’ve seen You’
gotten quite active on on Twitter and
that’s how this uh conversation actually
came about with my my co-host Travis
who’s also an a uh a power Twitter user
I think they call them so what what’s
the journey been like what’s what’s the
thinking behind you getting on Twitter
okay am I already in the power Twitter
years or am I or or how does you’ve
tweeted more in the past month than I
ever have so I’m just get getting a feel
for it which which is probably a million
times more than I have in the last day
even though I’ve sort of had a Twitter
account for quite a period of time I I
really haven’t I haven’t had a good
handle and I haven’t really activated
I’ve just sort of had it there for
collecting information I noticed you you
went to the states and you amongst other
people you caught up with with Bill
Amman and he he too was a a fond user of
of X or Twitter was that was that a bit
of the thinking or did it start
beforehand no it was when I was in the
US yeah I mean has he followed you yet
Jeff no he hasn’t but I saw I’m waiting
for him yeah I know he’ be close the um
but you know I actually saw when I was
over there I was over there for a few
weeks you I saw some of the big um you
fund managers you know saw Bill also saw
probably the the biggest player in the
closed in space now or listed Investment
Company or CL bace they talk globally
Bose Weinstein S capital yeah sa he’s a
bit of a he likes kicking heads and um
and and actually he he We are following
each other B is following me now so yeah
I’ve seen you you’ve had a bit of
interaction with him what was the actual
the purpose behind the trip to the
States was it to speak with a few people
get a feel for the market I know you’ve
got a a team in New York running the
global fund as well that’s right I mean
half of the team are in New York so the
logic was to go over there see them and
and just to catch up with some companies
seeing what’s happening in the world and
and from a Twitter
perspective um what I realized is on an
on from an activist P you know View and
that’s when you want to change or make a
difference and that’s one of the things
we’re focused on make a difference for
our shareholders who were investing
money for but also um you know that’s
that’s from an investment side but also
to stand up for them we’re very active
back in 1819 about W franking credits um
you an
illogical um strategy was floated by you
know then the opposition um and so it’s
really trying to be you work out how to
um you maximize that um pressure at
various points in time and and we found
with social media like the guys over
there if you know from a media
perspective everyone’s probably the same
but from a social media perspective it’s
different and talking to Bill about it
he was just saying you I said how much
time does it take and he said not much
he just said and then sort of now that’s
probably a month ago I sort of started I
think it’s taking a lot more time than I
thought and you’ve really got to
dedicate like just periods of time to do
it yeah and and like Bill’s he’s a big
believer in the closed in funds which we
are as well the listed investment
companies you he’s got a big one and
he’s you know he plans on raising you
know 15 to 20 billion in a new fund and
I I was saying to them look how you
going to how will that happen you know
what communication methods will you use
you know we’ve got 11 people in our our
shelter engagement comm’s area I think
he’s good got a few and he said I’ll be
tweeting so it’s targeted at more a
retail type of investor that that
product that he’s sort of putting
together right well I mean probably not
really retail like high net worths um
like a lot of his money is high net
worth money and this will be the first
time you’ll be able to get access to him
in a listed vehicle in the US because
he’s he’s got a listed vehicle but it’s
in Europe yeah um yeah so to me like he
he did the like when the specs were
raising money he raised uh 4 billion
yeah he was the biggest spec and they
had demand of about 8 billion
quite a busy time in the market when
when that all started and in terms of
speaking with these these big investors
obviously they run a whole host of
different strategies but what what was
the sort of view of the market you know
we’ve gone from a discussion about hard
Landing to soft Landing to to no Landing
how are they sort of feeling about the
the economy more broadly in the states I
I think they were more on the soft
Landing site I I think in the last you
I’ve been back for nearly a month I
think the last couple of weeks it’s
we’ve sort of moved to that you know
sort of uh no Landing yeah um and the
fact that you know that inflation seems
to be holding up and maybe we won’t have
an straight cut um so like to me it was
it was positive because you know we’re
in we’re in an election year you tend to
find money’s pumped into the system
because you know the incumbent wants to
get reelected and I think you people
were observing that you and they were
surprised that I mean go back a number
of months ago we were thinking about
five or six interest rate cuts and when
I was over there a couple of months ago
you know the talk was a couple but now
you know we might we might be talking
not much you no interest rate cut yeah
yeah I’ve seen the uh the numbers you’ve
put forward about the the statistics on
um how the market reacts in an election
year in the states although I don’t
think that’s really stopped the the US
government at least pumping up money
throughout any year it’s been it’s been
pretty rampant in particular coming out
of the co period yes Cooper in terms of
the Australian Market you you’ve got
your finger on the pulse with the uh
your working the various funds here
what’s the sort of consensus across the
ASX and the Aussie economy here yeah
obviously the Aussie economy is holding
up very strong we’ve seen you know good
retail numbers consistently coming out
of coming out of Australia and obviously
um Australians are dealing very well
with those interest rate Rises that are
happened again yeah we do we do probably
follow the US in terms of interest rate
kind of Direction but we see a situation
now where Australia might be leading
that that case in terms of um maybe the
first interest rate down you’re seeing
the us obviously get concerned about
when that first interest rate cut will
come Australia’s economy is showing a
few signs of wobbling as well you know
um there was car delinquencies that were
that were kind of the first sign of
crack in the last couple of days that
that might show that Australian’s under
a little bit of pressure um and even
though we’re really positive kind of the
smaller midcap space we you know might
be in a situation where we do see um
those kind of interest rates come back
in Australia before the US so it could
could be a yeah interesting period for
Australia Jeff you made a a comment in a
in a recent podcast that you’d done and
it sort of stood out it sort of spoke to
the the fact that we’ve seen interest
rates rise over the past 18 odd months
and for most of that by sort of 2022
we’ve seen the the market in particular
in the US perform phenomenally well now
that sort of relationship tends to be an
inverse one not not moving in the same
direction does that give you any sort of
pause in terms of where we’re sort of
standing now and what the next couple
years could be like yeah like to me
after I was going to say you know with
my gray hair which I don’t
have but if I if I had gray hair you
being in the markets for a long period
of time like you know they are cyclical
and and probably what surprised me this
period is the fact that you know like
the market has performed so well and
towards the LA you know last year we
haven’t really had any real cracks in
the market um so I mean the tough thing
is you know we we’re getting close to
interest rates coming down and then that
that is positive for valuation so it has
surprised me how well the markets
absorbed you know the fact that we’ve
gone you know from expecting in the US
six interest rate cuts to maybe not much
yeah in the way of an interest rate cut
and so is that the the fact you know
that the I mean there is still a lot of
liquidity in the system you know we’re
seeing some some very positive signs you
know the PMI numbers you you globally
picking up um so you know this time it
looks like you know the economy will you
will perform reasonably well and we and
we won’t have you historically you know
that that you the Federal Reserve tends
to get it wrong you titans’s too much
and we end up with in a you in a bit of
a mess but maybe this time they’ve got
it right another sort of topic that’s
been Center and you I’ve certainly
noticed it along with everyone we’ve
spoken about it briefly on the show is
this um this concentration in the market
so you got the the mag seven in in the
states and then in Australia we’ve got
our own concentration for for slightly
different reasons perhaps to do with the
the super fund setup across the banks
and the major Miners and whatnot but
it’s it’s gotten to pretty astronomical
levels and the the context in which
we’ve spoken about on the show is that
relation to to Commodities just
naturally because we talk about
commodities all the time but in a more
General sense does this sort of Market
concentration concern you is it again
just something you think’s a normal part
of the cycle I mean it it does wor you I
mean one of the good things you over the
last few months has been broadening
out and I mean from an astralian
perspective I know keep you talking
about it we’ve seen you we’re very keen
on the and probably globally you know
the the mid and smaller companies
relative to the large companies and
that’s because of an expectation of the
broadening of um of the market and and
and also the fact that the valuations of
the mids and Smalls relative to the
large is yeah is significantly out of
whack and that and that sort of plays
into the Wham micro strategy I noticed
you guys had done a placement for
another 75 million and part of the
thesis there is this Divergence between
the Smalls and mids and the and the
large caps so I mean is is that the main
thesis behind raising New Capital now
for that fund to to go and get after
some of these opportunities
yeah I mean it is yeah and and just on
that like you look you look at the um
you know so far this month we just came
out with an update yet yesterday is you
know the micro cap you know the guys
that are running that you know the
Market’s down you know 4 odd percent um
and and that fund’s down 1.8 yeah so you
um I mean first of all probably very
good stock selection but it’s you I mean
even in a market that’s
that’s been smacked around they
outperform by 2.2 odd perc and that’s
you that’s over the last 3 weeks since
the market sell off and before that
actually since micro Cap’s been listed
you guys I think they’ve outperformed
every year so I mean in Australia there
there is I think there’s enormous
opportunity um in that mid and small cap
space if you’ve got the team and time
and to do the work yeah we’ve we’ve
noticed a few other funds you you know
picking up new mandates and whatnot
going going after raising New Capital
after that that opportunity as well and
tying that more broadly into the the
leak market and the you know the
lits last time I I looked there’s about
88 of them on the ASX and 10 odd percent
are are trading above NTA and the the
rest are trading below and I know this
is a topic you speak often about and I
listened to one of your your calls on
the flight over yeah and you must have
had about two hours of questions just
just on this sort of topic but does that
sort of that ratio of Premium to
Discount is that just part of a cycle
and a bit of loosening up and
consolidation or how do you sort of see
that gee like I think it was on Twitter
yesterday oh Charlie mangao quoted a
John templon quote just about saying
that you the time to invest is when
everything’s out of
fashion uh and to me if you can buy a
dollar of assets for under a dollar yeah
then it’s a good deal um now I know you
know well of our we’ve got eight listed
investment companies it’s about 5
billion Farm 130,000
investors uh so we make up about 10% of
the market um as well and of our eight
five of them are trading at NTA if not
premium so to me it’s it’s it’s a supply
and demand um thing like at the moment
pick the market up until the last you
know 3 weeks the market had been pretty
you very strong the first quarter like
in the US you the market was up 10% plus
so when the markets are strong people
tend to want to get um single leverage
you know so they’d prefer to buy one
like shares in CSL and hope it goes up
20% but when yeah when it falls at 20%
Then they realize maybe I need a
diversified portfolio so you tend to
find money flows out of the closed in
fund Market when the Market’s hot and
then it flows back into it you know when
the market stabilizes or it’s coming
under pressure so I I think you’d find
the discounts have narrowed over the
last couple of weeks uh because of the
volatility in the market but to me I
just see it as as an incredible
opportunity you you’ve also been pretty
um you know on on the Move lately you’ve
gone to the states you’re flying to
every city in Australia and I was I was
speaking with with one of my colleagues
about this and the sort of stamina with
which you go after that and the the sort
of division of Duties in Wham you’ve got
the the investment team and then you
working very hard on on shareholder
engagement what are the sort of the keys
to you know creating a good LIC and
having it trade at a you know hopefully
on on sort of par maintained what what
are the sort of keys behind that yeah I
mean the probably four main drivers one
is perform you got to perform yeah
secondly is you providing the investor
with a yield and the great thing about
the you the list Investment Company and
I think I’ve on Twitter I’ve been
punched a few times because I’ve caugh
I’ve I’ve termed the phrase the thinking
man’s ETF I have seen that on
FL um and so so you need to do a little
to me if you know nothing about the
market by an ETF if you know a bit more
about the market then do a little bit of
research and buy a listed Investment
Company um
but but the second thing is to provide a
yield and the great thing about the the
company structure rather than the trust
structure which the ETF is you can
actually you know you can make money in
the year but you can pay that out over
time so you can um you you can smooth
the yield uh and the third thing is um
to you treat shers with respect and
you’d think that’s sort of a driver for
every listed company and it is and every
board but a lot of people forget that
and like they’ll raise money at a
discount NTA they’ll do things that
aren’t necessarily in shelter’s best
interest and the fourth thing which is I
think everyone misses and that’s the
hardest part and I mentioned earlier you
know we’ve got 11 people in our shelter
engagement and our communication area
and it’s really to communicate you with
the with the owners of the business and
so the reason we’ve just done the other
two we Road sh going all capitals Maj
just
capital cities in Australia um in 6
months time we’ll do a Regional Road
Show going to the regional centers uh is
to talk to our shareholders you know
they ear the company and we’re there
because they’re there and if you put all
those together effectively as Buffett
you know talks about the weighing
machine being the market um it it’s very
simple like like if all your
shareholders are happy with what you’re
doing um it’s sort of first year e
economics in terms of what you trying to
do is get the share price to equilibrium
and equilibrium is NTA and that’s where
it should be um and the reason why it’s
trading at a discount NTA would be
because some of your shareholders aren’t
aligned with what you’re trying to do so
that they’re prepared to sell below what
they’re worth so if everyone understands
what it’s worth and they’re happy with
what you’re doing then there’s no
selling uh and then you actually um all
you need is a little bit of buying and
they Trade It N if not a premium I mean
the one
um Wham research you which is trading at
about a 15% premium at the moment that
was that traded at a discount for seven
years that was the longest it took us to
get one to trade at NTA uh and that
really because it took time to
communicate with all those shareholders
tighten up the share register and event
we eventually got it NTA and the crazy
thing because we did we unfortunately we
probably did too good a job and it ended
up trading at a 58% premium it got to
and that was just that was just a few
years ago which is as crazy as something
trading at a 10 or 15% discount that’s
going to leave some shareholders
frustrated in the in the long run when
it when it mediates 100% And and we you
and that’s why we want to talk to the
shers we we keep trying to explain to
them you try to buy at NTA or a discount
you obviously the bigger discount you
can buy it the better yeah so yeah I
mean to me that’s that’s the flip side
of that and then we’ve got to deal with
that but unfortunately it was there and
we the more can educate about this
sector the better and that’s probably
why that’s another reason why the
thinking man’s ETF yeah I’ve got a quick
one for you Cooper there’s there seems
to be a sort of in ingrained um
philosophy in Wham through through Jeff
of you know going out and and meeting
people whether that be shareholder
engagement or just you know when you’re
sort of up and coming just meeting
people in the industry and whatnot does
that strongly tie through in the
investment style do you are you sort of
big on meeting management or is that not
actually a bigger deal think there can
be a bit of deception or whatnot in that
no most definitely most definitely one
of the core core bits of IP on our
investment process is is meeting
management and pounding the payment
getting out there and seeing as many
companies as we can through the year um
and companies over and over again and
just making sure MDS and management
teams are consistent in their messaging
to us and and you know we’re able to get
that feedback from them by by meeting
them over and over again and that is
yeah it’s it is it’s a core core driver
for our investment process and we do
make sure we do that with every company
we own yeah because when you think about
it like people are giving us to manage
money on their behalf so they need to
believe in us and trust us when when you
buy a share in the company you’re
actually giving your money to the
managing director of that company to
look after it on your behalf absolutely
we try and remind companies on the show
of that every single day that it’s you
know they’re the management or the
shareholders 100% And and the Board
needs to understand that they’re the
board for the shareholders too unfort
and you can see that in Divergence in
share PR on shares and different
companies if if companies are really
good at engaging with their shareholders
and stakeholders then yeah it really
helps the share price in the long term
as well and it’s a message that we try
and deliver to management teams as well
so yeah yeah in 100% agreeance with you
there yeah you definitely see it with
with a lot of the miners as well there’s
an extreme premium paid on you know high
quality management whether that be you
know Mark Clark at Capricorn comes to
mind the guys at Emerald Morgan I know
you guys are invested there so Jeff to
to tie um what you’ve said about the
discounts in and you me you mentioned
one of the people you met was Boaz in um
in the States run SAA he’s taken pretty
um substantial stakes in a whole host of
um licks across Australia how do you
sort of see activism playing out in this
sort of cycle of consolidation yeah to
me it’s just a normal cycle you look at
the listed Investment Company space when
we flood a Wham Capital which is you 25
odd years ago I think there were there
were 20 you know the high 20s numbers of
listed investment companies you listed
in the stock market we did get to close
to 120 of them uh and now you as you
mentioned earlier you know we’re down in
the 80s um it’s just the Classic
consolidation phase a lot of people uh
think they can create a list investment
company and then that’s great you know
they they raise the money they do the
road show and then I we’ll just get the
fund manager to manage it and everything
will be right they don’t
realize there’s you the market is made
up of supply and demand and that um that
you need to make sure there’s continued
demand for your share price to be
trading around that NTA figure and so to
me it’s just a natural consolidation uh
phase um it’s good to have you know
someone like Saba uh you in in the game
um and you know go back over the last
you know 20 30 40 years there’s always
been different players that have looked
at the space um and and sort of turned
up and then gone and you know sometimes
come back again so to me it’s it just
sort of just keeping everyone on their
toes so to me it’s positive and you run
you know eight different leaks now and
I’m curious because you have been a
consolidator of a number of these over
over the past few
years obviously there’s various
strategies across the the various listed
companies there but do you sort of see a
point when you know you mentioned
Buffett and he he often speaks about
having too much Capital to manage and it
being a a real hindrance on performance
do you sort of see any limits or is that
quite a way off in your opinion for the
likes of Wham Capital Wham
Global yeah well there’s a number of
questions there in in terms of you
consolidating the industry oh well like
we’ve taken over 12 LC So in theory
would have been there’d be 100 lacc’s if
we hadn’t taken any over but that’s just
because they’ve been trading at
discounts and it made sense uh for them
to be in our stable we believed but in
terms of the the various um the
strategies well the strategy and the
pools of capital of course you know
there are restrictions on them like like
Wham capital is about right in terms of
size you so that won’t grow anymore you
know Wham leaders is at the moment
taking merging with QV equities um you
so that’s got the potential to keep
growing wh Global has the potential to
keep growing and wh microcap you you
mentioned earlier we’re doing a really
little raising there but that’s probably
about the right size um you know so to
me there are restrictions yeah there’s
there are other strategies that we at
various points in time might create new
vehicles for um you know so to me it
will be dynamic and at the moment we’re
10% of the LIC um sector I think the
sector will continue to grow and I think
medium medium term you know would be
closer will end up closer to 20% of the
sector but I think you raised a good
point in micro as well where we’re doing
a raising now we actually have the
ability to take more than we actually
are for that for that reason there is
some funds that that it becomes
increasingly hard to invest in when you
have an increased amount po of capital
100% like two years ago we did a raising
for micro micro and we we raised 88 mil
this time on a on purpose you know we we
probably could have you know we could
have raised in excess of that because
obviously the you the fund’s bigger we
thought look let’s restrict it um
because we don’t want to raise any more
than this and that’s you as you said
just controlling the capacity and in
terms of you know getting them to the
trade at um NTA a lot of people point to
BuyBacks you’ve said in the in the past
that you don’t think that is as an
effective approach do you still hold
that view oh 100%
let me give
you well I can give you a couple of case
studies is one is um with Wham research
we actually bought back 35% of the
company in the first three and a half
years it was listed and maybe the fact
that it took us 7 years was because we’
done those BuyBacks now logic would tell
you that a buyback makes sense you know
if you’re buying a dollar at 80 you then
every dollar you buy sorry every dollar
you buy at 80 cents yeah increases the
NTA so so that’s the logic unfortunately
investors don’t see it that way for
closed in funds because what they think
and and if I had a group of like a
thousand investors you know in front of
us now and ask them to put up their hand
who likes BuyBacks I’d say 10 or 20%
would say they do 80% would say they
don’t because they think um well why if
if you’re buying at that discount you’re
the fund manager don’t you believe you
get a better performance from investing
that money um so if if you look at all
all the stats about BuyBacks um they
don’t work for listed investment
companies and in terms of Buybacks in
the in the investing sense I’m I’m
intrigued given the the focus on on
dividends across Wham some of the coal
names in the mining sector come come to
my mind because they paid huge special
and and inum and full year dividends
over the past couple years is that
something Wham will sort of Lobby
against and they’ prefer the the
companies to pay dividends out want I
start and then maybe go to CS is what
how how we pay our dividends is from
profit we make so yeah we’re we’re
looking for to buy undervalued growth
companies and buy them when we can see a
catalyst is going to change the
valuation and so we’d prefer to make
capital gain rather than dividends yeah
the fact is that we then pay tax you
we’re a Trader for tax purpos so we pay
tax so we’ve got effectively that tax
paid on our balance sheet arguably so is
it better that we keep it on our balance
sheet or give it out to our shareholders
as a fully Frank dividend so that’s the
dividends is sort of is the end result
it’s not we’re not necessarily looking
at coal companies and CS do you want to
talk about you know yeah I just think
it’d be just simple to say we don’t
really have a preference on what the
company actually does at an indiv
individual level you know total
shareholder return yes correct yeah yeah
so get getting into the investment Style
of of Wilson you’ve spoken about this
philosophy of half holds or value holds
with a with a catalyst and then the
other half is a a more trading book type
approach which I think I heard you say
turns over four times a year so I want
to hone in on the the trading side of
things to start with and hey Well’s
let’s just let’s just get it right so
half of it and and this is half it’s the
undervalued growth companies and we’ll
buy them when we see a catalyst that can
change evaluation and sort of how it all
came about was that was how we started
but then because we’re waiting for the
Catalyst you a company might be cheap
but there might be a catalyst that’s
going to change the valuation then we’ll
end up holding cash and then when we’re
holding cash yeah if you’ve been in the
market a long period of time then you
know there’s always opportunities
whether it’s a placement at a discount
an IPO a block of stock at a discount or
you you see you think there’ll be a
short-term trade so that’s that’s how
sort of the two pools of capital turned
up but you you want to go on the trading
side you want yeah just just to
understand the the sort of philosophy
behind yeah the strategy whether it’s
you know focusing on taking stock in
placement or Mak making money CS do you
want to talk about that yeah not a bad
philosophy yeah again again yeah
non-discriminatory kind of any way to
make money but it’s yeah if we if we
don’t have a long-term view on the on
the company or the resource or anything
like that but we do see like Jeff is sh
saying an opportunity where there’s a
mispricing in the market and we still do
look for catalysts even on that trading
side a catalyst that might might close
that mispricing or close that discount
or or you know make it make a stock rate
so we do do that on on the trading front
as well just might not be as a longer
term hold as the research position but
generally following that investment
process um really you know looking for
undervalued growth companies with
catalysts that will that will cause it
to rate that still does ring true on the
trading side we just have a bit more of
a dynamic approach on how to approach on
how to look at it and where those
Catalyst what those catalysts could be
and and if you just want to go down that
route I I remember back in the early
days you so so um I’m my background is
Industrials you know I was industrial
analyst and you my first job in the
early 80s was uh um Scottish h i was
investing industrial companies uh you
know small sort of those undervalued
growth companies you know when I started
Wilson Asset Management you 26 OD years
ago I remember in the early days you
like you’ve got got that um as an
investment uh but then also you’re on
the trading side you’re trying to find
trying to make money and I remember Owen
hiy coming into our offic just me me and
him in his very early days and I think
he’s raising some money I don’t know if
was oxan or the one before that um and
he was Raising some money I think it was
at 5 cents and I think they’re trading
at 6 cents so of course I was in yeah
like figur I knew there was some an
opportunity there unfortunately I think
we I sold them far too early in that in
that example yeah yeah did you did you
stick with him in in later iterations of
his well unfortunately no to me it was
more you that was more on the trading
side I mean since you Cs and will um
have joined us who have more of a
resource um uh experience then I mean
historically we’ve tended to buy not
necessarily you know the the mining
company but the company that’s selling
the mining company the pics and and the
mining services
um because you the hard thing with
mining companies obviously you know it’s
hard enough to work out what a company’s
going to earn um a mining company you’ve
got commodity prices as well yeah so
it’s another Dynamic yeah hey Mr Wilson
I reckon I got a bloody deal for you
talking about buying mining services
company and then but worried about
commodity prices going up and down Krill
JD and I’ll tell you why tell me cuz
mate commodity price some Commodities
might be up some Commodities might be
down down so look if it goes down in one
commodity they start drilling the other
commodity that one goes down they start
drilling that one when it goes back up
commodity
agnostic drill so right Jeff I’ll do the
intro for free if you want to bloody get
some private exposure to a mining
services company I reckon
cadr is the company we’re we’re a me
we’re a we’re a matching service JD I
think we fac itate the connections yeah
M’s he’s probably not sure I have a bit
of cash to tip into a venture like this
but you’re always going to need RC
you’re always going to need Diamond
you’re always going to need airor so
Jeff Jeff just give me a ring if you
want an intro uh to the best Bloody
exploration drilling company going
around and as I said I’ll do it for free
thanks K what a BL thanks thanks Matt
all right let’s get back to it and in in
terms of um going back to your tweeting
you you put up or you retweeted I think
this post from Morgan Stanley it was a
list that compiled of 50 of the the best
moat companies in the world and I
remember seeing this with with Trav at
the time and it actually got us shatting
I thought it pretty interesting and
obviously you speak about industrial was
being a focus and there was a whole host
of different sectors covered in that
list but there was no mining companies
covered in that list and I I kind of
disagreed with the the exclusion there
you know say comparing a a Tesla with a
a BHB when you’ve got tens of billions
of dollars in in sunk capex up in up in
the P bra I I know you you know you were
just retweeting this but did you have
thoughts on um you know on the list I
know you mentioned 10 odd of them are
are held across the the global portfolio
I think the Wham Global fund yeah like
to me it was as you said on Twitter I’m
just learning this game yeah when I saw
it I thought oh that’s interesting yeah
and then asked the global guys which
ones because they’re mainly global
stocks which ones do you own and the
list was actually a little bit out of
date a company had already disappeared
been taken over I think was on the list
yeah okay so it wasn’t that pure um but
to me it’s you to me the interesting
thing is you talk about Moes and and you
mining companies yeah I’d agree with you
yeah they do have much and I don’t know
you you Tada you’re you’re probably a
bit young but for the older people
listening to If You cast your mind back
to you when you Robert homes Court was
around
um now when he um yeah was making his
various mining plates you he was looking
at the lowest cost producer he was he
was trying to find globally you know the
best lowest cost you producer for his
you Bell
resources and that has to be a
significant Moe if you’re the lowest
cost producer then you’re going to be
making money and until you until
everyone else is losing it aren’t you so
that must be a m and to to to tie in the
resource sort of focus with um some of
the Acquisitions you’d done we spoke
just before the show about about West Oz
and you um floated the idea of
potentially having a a leak that was
resource focused you didn’t end up going
down that sort of road is that something
you you think you’d approach there’s
only a couple names that I can think of
that are you know natural resource
focused leaks on on the as on the ASX is
that something you go down again to to
me it’s a bit of a tricky one yeah
because historically that space hasn’t
worked like when when we you know when
we’re sort of when we were talking to
the um you the guy you know the westto
guys about um you doing that deal the
logic was whether we kept one of the
entities alive and whether you know CPS
and will manage that um it it was a
relatively small pull of capital you
which can be good because you don’t have
to get that much demand for to trade at
NTA um historically you know listed
investment companies that are
resource-based they haven’t lasted um
whether it’s whether it’s the volatility
people are concerned about the
volatility so at various points in time
now they’ll trade at NTA if not a
premium uh but then they’ll you you know
when when there’s a lot of volatility
you people don’t want to take that risk
so I haven’t seen examples of them
working I’ve actually seen in in the
Australian context I’ve actually seen
examples of them working in the U in the
UK okay uh but that’s really when it’s
it’s sort of it’s it’s it’s when you’re
looking for yield plays in the resource
sector and and the guys that have played
you know set up the one in the UK they
were looking for putting money into
prefs uh they were trying to get a yield
carry on resources yeah yeah there’s
something I think we’ve sort of noticed
across a lot of the funds that we speak
with not not all listed but you know
smaller amounts of capital does tend to
you know lead to especially if you’re
ating in the more inefficient Junior and
midap Mining space leads to leads to
better
outcomes zooming out a bit to you know
find our way into Commodities given
you’ve got the the global fund have you
guys got a view on on China at the
moment there’s obvious been a lot of
headlines about the the property sector
and everything going on and it sort of
comes up on our show pretty pretty
regularly obviously because there’re
such a enormous consumer of metals at
the end of the day so is is there a
strong view on how their econ is sort of
shading water yeah I think I think I
think that the the view is or that sort
of broadly house view is that they’re
going to they’re going to hit their
number you the GDP number um you know
they’ve been trying to do it by
stimulating consumer um you and so it’s
it’s you they’ll probably do whatever it
takes H the numers so you know one of
the good things for Commodities you know
globally with inflation sort of holding
up a little bit you with the PPI numbers
improving um it looks like you the
global growth um will will be all right
and so we know that you only need you
know a couple of percent move in demand
and commodities you know some
Commodities perform really well and on
that end you like probably one of our
favored Commodities is copper and you
obviously why is that because if Global
if global growth’s you know doing
reasonably well if China holds in there
and then obviously you know with the
renewable um you where copper fits in
there yeah I came to came to go
deeper yeah I think I’ll just yeah again
enhance your point on China I was lucky
enough to go up there last year and kind
of have a look around and and as Jeff
was mentioning they do whatever it takes
to hit those numbers and it was a
unified front that they would give us as
investors i”d say we’re not we’re not
going to hit the economy with a bazooka
like the us or anything like that it’ll
be slow you know me Meed measured kind
of um incremental little changes in
their policies that’ll kind of keep
their growth rolling and going really
well and I suppose another good thing to
point out in China at the moment is they
don’t have inflation they don’t have
wage growth you know they’re actually a
very competitive country it comes to
exporting and that’s been also propping
up you know kind of their economy and
their output numbers so I think that
combined with a few other things uh are
holding out well against that property
backdrop that doesn’t look quite as rosy
at the moment yeah yeah the only catch
with the numbers is what’s the the
what’s the real numbers when you’re
looking at China but uh you know it’s
been that way for a long time and and
the growth is
undeniable undeniable growth JD were you
talking about Brooks just then I just
tuned into that un undeniable growth I
don’t know what you said before when I
hear the words undeniable growth Maddie
Brooks is it just comes to the Forefront
of my mind and that’s Brooks Airways the
Brooks group in general like look just
look at have a look at the Brooks
websites even the amount of websites has
grown from Brooks like mate Brooks
equipment sales just jump pumping out
xcmg big yellow gear now Brooks Airways
just growing exponentially on the back
of money of mine vetting it 100% we know
that the big deal they’ve just signed
Maddie like you’ve said there’s nothing
much they can’t do Australia wide you
know wherever you are just give Brook
you need to hire anything just call
Brooks well the and speaking of that
like Brooks High the OG the OG Legacy
business I don’t think there is one
listener that wouldn’t be able to find
something on any of those Brooks
websites that to buy or hire that they
wouldn’t be interested in it like they
would find something that they need
across the Brooks group I don’t think
there’s any other company like that
going around Brooks Airways Brooks High
Brooks equipment thanks for your support
we should put the shout out to any
companies out there I’ve heard it from
Wham they like to fly in the Brooks Jets
so you just call Brooks for any site
visits any investor days you’re going to
do get Brooks to do it for you right
Jeff flies it himself he’s got a plane
ticket he’s got a uh pilot ticket yeah
right let’s get back to it jez Brooks
going deeper into into copper into some
specific names we’ve seen a bit more
action after a bit of a you know a few
years of a dir of ASX plays in terms of
copper you’ve seen Capstone put out a
CDI PR the a medals acquisition Corp
listed and obviously you got sandfire
with the big mats acquisition a few
years ago sort of coming into their own
what are the sort of ways you’ve looked
to play that given your bullish Outlook
well in the early days it was man eyes a
mine but that’s not listed anymore so
you can the assets are still pretty
important there yeah got that was a
shocking company to trade yeah you yeah
the odds are you’d always lose money on
it one to probably steer
clear I I would just say it’s it’s a
tough space in Australia obviously
there’s not a lot of um Choice out there
and that has you know that has been the
I suppose the driver to bring these
Metals acquisition Corp and Capstone
down to Australia and get those
Australian investors invested in those
companies and we have played in some
small part in both of those both of
those moves but sfire is still the main
one that where we’re keeping eye on as
an Australian investor um you know it’s
it’s obviously doing really well it’s
transitioning into a bit more of a a
grownup kind of company and it’s got
growth both in Botswana and Spain to
come through um um if copper prices keep
going up I think now they’re around I
suppose 425 is the right level and we we
talk to most of our analysts and we rely
on heavily on analysts on their views on
on what they’re up to that they
basically think that 450 might be a
level that it could get to in the short
term um yeah if that’s the case then
sfire still has has a little bit to run
in our in our view even though it does
look fully valued probably at current
prices yeah yeah they’ve obviously for a
large company got got quite a bit of
talk given the enormous amount of debt
they took on to to fund the matah
acquisition a few years back T tying in
the sort of talkk type of um discussion
you guys had contributed to this note
that we put out of aggregating a few
Fundy views and New World Resources was
the the one you touched on this is
obviously at the the very opposite end
of the spectrum to sandfire but they’ve
just raised another uh $20 million I
think and you know going after their
their antler project what’s the Outlook
there yeah they did it it was quite a
large raise and and we we basically like
um that project there’s a few questions
around the middle OG and stuff around
that project but really really really
like the kind of exploration phase we
back management Mike Hayes has been
quite good in our conversations with him
about how he’s kind of processing or
progressing that development into
production um I mean there is more copon
in the world um that that project um
antler looks like it will become a mine
uh eventually over time when it gets its
permanent in place and we just thought
there might be a bit upside in that
Junior space if they have success with
the with the drill bre and exploration
we’re looking at another asset called
bullhorn down there so yeah that’s been
one where investors have been coming
down the curve to try and find you know
a little bit more Spice in that copper
space that’s been one that has come up
in conversations and in terms of I
tweeted when I tweeted that there’s a
bit of there was a bit of
um I I think we we tweeted on the um
Firefly which is which is other one in
Canada but yeah yeah yeah flyy is one
I’d seen you tweet about K to talk about
that too they’ve obviously got a a
management and sort of uh capital
structure that’s quite supportive
obviously that came in rebranded the
company they they all got a bit they all
I don’t know I’m not sure I I don’t
fully understand how to you like
interpret some of the tweets at this
point yeah I’m not sure what they’re
telling me well I’d have to go go and
check the reading but my my gauge is
often I’m often going on to Trav and say
what does this actually mean but um yeah
I mean Firefly is an interesting one
because the the management have you know
they’ve got a a reputation and they’ve
done things at in Belleview in the past
that have worked out quite well and
they’re sort of using that brand and
that sort of Goodwill that they’ve
perhaps built up in the in the market
I’m sure that’s part of the thesis in in
bing on Firefly yeah I think it it comes
back to what we were talking about
earlier about shareholder engagement
these guys are really good at promoting
their stocks and and keeping
shareholders engage and letting people
know what they’re up what they’re up to
and what they’re doing um they’ve got an
asset there that’s been neglected for a
little while they’ve raised money and
they’ve got a you know that um yeah 100
km drill program growing into it and
testing it down dip and also testing for
new loads and I think the excitement of
that those kind of um those results and
and that news flow for the retail
investors is really good but also yeah
it is just proving that or developing
that mine out from into a possible
production story like they did with biew
obviously you know you get good asset R
rates along that
Journey transitioning Commodities uh
lithium’s another one I’d heard you guys
speak about and obviously been front
antenna on on a lot of people’s minds
lately you got the the EV narrative
obviously dominating that story where
lithium’s going to be almost entirely
consumed by batteries in the in the
coming years yeah it’s been on a a
roller coaster ride over the last you
know five or so years now sort of
breaking you know breaking water again
you know I think at last time I looked
almost 1,200 us for a ton of spod Y do
you do you think we’re sort of at a
level where you know it was too far into
the cost curve and these it it sort of
pulls up a bit more and some of the
miners start to perform it’s certainly
been acting a little bit more rationally
as of late and I mean I think you saw it
in P’s announcement this morning the um
I think the average realized price over
the last quarter was around $ 800 um
doll but but coming out of the quarter
you you’re saying it’s at the $1,200
Mark and that’s what we see as well the
prices kind of have bottomed you’ve seen
irrational Behavior where supply has
come out of the market and and now there
is kind of demand and that price will
start to trickle back up do do we think
it’s going to explode again like it did
uh you know almost 18 months ago we
don’t we don’t think so we don’t think
it’s going to have that kind of spark
but um the one thing we we do know is
that yeah it has eaten into the cost
curve we’ve got really good producers in
Australia that sit below that level and
are making really good money HRA for
example I think average cost was about
520 so yeah they’re Mak making really
good money at current current prices um
the the other thing we would note is
that the Chinese they do like to
speculate they do like to buy when they
think prices are going up and stockpile
and they do like to sell if they think
prices are going down and they’ll keep
using their stock bares until they
deplete that’s a really important factor
to look at I suppose in the lithium
space is stock piles in China and while
it’s pretty opaque to get a good view on
how that’s happening the the people we
talk to up in China are giving back
reports that we’re starting to see draw
Downs on those stock piles and and while
while while we said it might not be an
explosive you know increase back to the
prices we saw before we think those will
trickle up over time yeah the the
destocking restocking has been a huge
narrative in in lithium in the last year
in particular and I’d want to go to
China and count what they’ve got on the
pads there myself just to make sure but
with hbra one of the fascinating parts
of the stock is the short position and
I’m not sure Jeff if you’ve seen a stock
with as high 22% roughly last time I
looked of the stock on issue has been
sold short I’m not sure Cooper if you’ve
got a good read into why we’ve kicked
about on the show why that might be it’s
a liquid name people might be bearish
lithium and all these sorts of things
but do you have a view on why that short
position has just maintained its level
yeah it’s been certainly an interest
interesting one and I’ve heard you talk
about on the show and I probably don’t
have whole lot more to add on onto how
you guys have discussed it in the past
other than it has been a very clean
proxy for hedge funds to play in in
their bets against lithium yeah it’s
fascinating and in terms of other
lithium names oigo I think is one that
you guys had kicked around or we can
talk about minr as well they’ve
obviously got a big a big lithium
business are you an iGo holder at the
moment not at the moment no we’re kind
of shaking out by a few price moves
there um we do own Min at the moment um
quite positive on that story I think the
way we talked about China before kind of
gave us or gave you guys a kind of view
on how we’re viewing inor we think it’s
kind of bottomed and and trange rating
between that maybe $1 130 and and $100 a
ton sort of sort of number we think that
bodess really well for Min resources and
then also you’ve heard us talk about
what we expect for lithium and a slight
trickle up in prices there would
certainly be positive for M resources on
that front as well yeah they’ve they’ve
bounced quite well the last couple
months and you know a leader in in Chris
Ellison who’s divisive to you know put
it in one word I think what what’s the
view are you just sticking with him he’s
got you know coped a lot of flack for
the the The Leverage The Debt on the
balance sheet at the moment do you just
sort of have full faith in in management
there or is that sort of net debt and
sort of you know EIT diametric something
you’re you’re watching quite closely
before keep answered I remember going to
Perth years ago in the early days with
minres and sitting down and hearing the
story this is in the very very early
days I’m thinking not sure mining
Services no no no no no I didn’t mind
the mining service but the whole concept
oh we buy get this mine and we we anyway
that was that was an error it’s worked
out quite well yeah he’s done extremely
well incredibly yeah and while would be
yeah would be ignorant to ignore those
kind of metrics that you mentioned
before for but um but yeah at the end of
the day we do kind of had faith in Chris
and his view view of the world and and
we do hear Whispers from wa that there
is kind of interesting things happening
in these lium Division and and also in
the gas division so we’re waiting to see
how those do play out um for his company
and and yeah but you do have faith and
and we think that it’s a good backdrop
for him at the moment and he’s also
shown the market that he does have
multiple levers to pull if he needs to
on that kind of capital front yeah yeah
he included this cracking chart in the I
think it was the halfe results with the
the performance I think off the top of
my head it was Apple Tesla yeah
Microsoft and minr interesting set of
comps there but um just just a round out
on on minr obviously they’re bringing
online Onslow which is the biggest
project they’ve ever done they’ve sunk a
phenomenal amount of capital into it
there’s you know a lot of people call
ion or pretty straightforward just a
game of logistics and economies of scale
although there’s perhaps a couple more
novel techniques that they’re using that
dust suppression and the the trans
shippers without having the the full
peer built do you have do you have faith
that they’re going to get that on time
on budget like like Chris has said yeah
and and again we rely a lot on on on
Specialists and analysts that go over
and actually view these projects and
have a look at it and um yeah I think um
June 24 is still still the flagline that
people are saying and we don’t have a
view to an opposite view to that so we
still think it’s on time on budget
obviously the hall Road’s a little bit
delayed but I think he’s done a
fantastic job getting that project
um up and running or up and ready to run
very very soon um and at the end of the
day when that gets up I think it brings
his average IR all cost down to
somewhere around $40 and current current
prices he’s making really good money and
the payback on that Onslow project is
seriously impressive beautiful on on the
topic of
uranium firstly with with you Jeff this
is a a sort of story in around uranium
that must have you know sort of flip
flapped massively in your time the the
very early days when you could buy ra to
get direct play in uranium and yeah it’s
just changed and the the perception now
it’s now it’s the you know one of the
ways in which we’re going to address
climate change whereas you know perhaps
in the in the 80s when you started in
the funds management industry it was the
um the thing that was going to end the
world so it’s interesting to see no no
that wasn’t that bad because yeah yeah
Ra was around and you so you could get
you could actually get a nice simple
uranium play in in terms of the The
Narrative around it in the sort of
popular culture I guess we we saw
protests in the streets you know in the
the’ 70s ‘ 80s sort of died off over
over time and nowadays you know that
sort of similar types of people are are
pointing at it as a way we’re going to
get out of the the sort of climate
change crisis and that sort of leads us
to today where Australia is a a country
with you know the most uranium reserves
in the world there was a policy for a
long time with you know capped how many
miners we could have but we got a few
more coming online and boss I noticed is
one that you guys hold they were meant
to be producing a month
ago um a couple delays along the way now
they’re you know the sh it uranium we’ll
go to B and C it but in terms of the
interesting thing is as you said earlier
like we’ve just been around um all the
capital cities and and a couple of um
shareholders and the the shareholders
that have time to come out to their
presentations it’ll there’ll be some
younger ones but it’ll tend to be the
the more um middle to um you know older
investors uh and and a few of them had
asked that question you know what what’s
your view of uranium and so I I suppose
it I suppose yeah we we all know it’s
it’s well and truly a topic the you you
sort of asking what is my view like
should we have uranium or not I haven’t
got a strong view yeah just maybe we’ll
go to you know then we’ll talk about the
stocks let’s let’s get into the we can
go more stock specific it has been a hop
topic and and um my colleague Will
Thompson has been awesome at calling
this one and I think you’ve talked about
kind of these things on your podcast
before where um you do think markets are
efficient and these these things will
turn really quickly but often these
things are a slow burn and do take a
while to catch on especially in the
equity space so I think we’re seeing
that in in the uranium space and um
obviously you’re seeing that supply and
Global Supply it’s it’s harder to to
come across at the moment I mean we had
a little spurting uranium price just
last week on the back of some rain that
happened in Kazakhstan you know so it’s
still a very tight physical market so
and uh so we’re you know obviously
keeping a close eye on it but on the
longer term view um I suppose you’ve
kind of alluded to it yeah that the
investment thematic is changing and and
the I suppose thoughts around um uranium
is are more kind of viable energy source
is changing as well and that that can
only be positive for the for the
commodity yeah are there other way in
which you’re playing it paladins are I
think the biggest player on the ASX now
not sure if you’ve H or have held them
in the past they’ve been a story from
the previous cycle yeah yeah we have
held them um we don’t at the moment at
the moment we just hold boss Energy
across a few of the funds um hely kind
of being that we’ve got bit more
confidence around boss’s kind of ramp up
and and into production that’s coming
quite soon so um we’re kind of following
along that story a bit more closer um
and Paladin we just kind of let go um
seemed to us that it was quite fully
valued and so we kind of well we moved
our position to boss yeah I notice some
of the S side that they do these one
times nav analysis then they do a blend
of 50% nav and 50% a six time multiple
and then that moves to an eight time
multiple then it moves to a 10 time and
a 12 time so yeah it sort of pulled away
and then the the price sort of helped it
out a little bit to to Pivot Commodities
once more Jeff another another one of
your tweets was about gold and how
Gold’s relationship with real rates has
decoupled in in recent times and touched
on on Belleview and the team there but
is there a sort of broader bullish
outlook on on gold within Wham I mean
that was an interesting tweet wasn’t I I
should spend time and do a few more of
those yeah because I made a statement
and then I asked a question and yeah
like a lot of people there was a lot of
discussion so if if you want to if you’d
like to collect information it’s a very
efficient way of collecting information
um the C like in in theory it’s it just
looks like it has decoupled and it’s a
it’s a risk commodity isn’t it um uh the
have you got have you got a
specific of go yeah it’s always a tough
one it’s it’s obviously a lot of
macroeconomic fact factors kind of
playing into how gold moves um generally
it’s been quite positive the the price
movement of course going up is is always
positive but in the face of you know
what looks like um us you know like
you’re saying it’s gone from six rat
Cuts expected to to two and gold is
still held up reasonably well in that
environment the US dollar is a Little
Bit Stronger gold still holding up
reasonably well and I suppose if you
look at kind of a more longer term view
I think um central banks buying gold has
has been well flagged around the world
and that certainly helped the share
price at the same time when ETF um
allocations have been decreasing so
certainly if you if few positive signs
with the gold price up against a few
headwinds that we see out there so and
and then the names you’ve played bevs
come up and um Emerald resources as well
um just just a touch on the on the two
of them emeralds are fascinating one
because they got the asset in Cambodia y
trying to come in here in one of the
most long-winded takeovers that I’ve
I’ve ever seen um but that that should
in principle if they can get a mine
online um you know help out the
jurisdictional risk across the the
assets that they’ve got is that part of
the them as well as you know what we
tied on with uh with Morgan and the
management team there yeah definitely
with Morgan’s done an exceptional job
he’s got a very very good competitive
Advantage up there in Cambodia and he’s
doing really well in in kind of all
relationships up around that part of the
world um he did a really good job I
think he knew that the bullseye
acquisition would be very complex and it
might take a little bit longer than
expected he messaged that well to
investors but also he sees the
opportunity in that asset as well um I
really do think that got a lot of of
Australian um focused investors across
the line and able to own that stock in
that regard he’s also got another
project up there next to O Val mot that
he’s looking to develop and and we
really back him as a Mind Builder um and
so we expect him to do really well
bringing both Bullseye and mot online
and you’re going to have a really good
gold company at the end of that so
that’s that’s kind of the thesis there
and to to touch on Belleview quickly
they’re um you know they’re performing
phenomenally they’re getting a bit of
that you know rate as they drisk from
being a a developer into a a producer
yeah but there’s been a lot of talk of
um a capital raising potentially
happening they’re in that touch and go
sort of phase fully drawn with their
debt and you know starting to see some
money come in the door are you in the
camp that they might raise I mean I
don’t think it’d be the worst thing in
the world given how strong the share
price has performed but what are your
thoughts no it’s it has been incredibly
strong but I think it’s been strong
because people are starting to get a bit
more forward-looking on the stock there
through that commissioning phase and
looking at a really really good FY 25 um
indicated that those numbers around
costs and production guidance will come
out with the next quarterly or so around
June July timing for these guys and I
think the Market’s pretty excited to see
what that could actually bring
especially in the current gold
environment we’re actually on the other
side of one of the bets with with Maddie
on on whether they raise or not and I
know he’s giving himself a bit of leeway
with a $250 Target price but but um Talk
himself out of it already 100% but um
but no it’s it has been a um a very
contentious stock within the market um
we saw the short shorts increase all
through the period where the stock Rose
from a130 to a to eventually that1 80
level and then we saw the shorts cover
as Bev kind of alluded to the market
that they have got through this kind of
commissioning and ramp up phase
um not unscathed but essentially their
job is is to you know be efficient
allocators of capital and they’ve got if
they get through commissioning and it
goes into full commercial production you
know with only a dollar left in the bank
account then that’s a good that’s very
well done from the company and we think
they they’ve done extremely well kind of
guiding through that period yeah yeah
we’ll see if they can get through that
period the um the last uh sector I want
to touch on is mining services and I’m
interested to hear to start with is this
something you you know a sector you saw
as a more safer place to play over the
the history of Wham given it you know
was perhaps in part sheltered from the C
locality of the you know actual mining
companies I suppose in terms of our how
do you work out what company to buy
you you you’re trying to buy um you
because we’re trying to buy those
undervalued growth companies then you
then we have to forecast the earnings
and in terms of getting any your best
chance of forecasting the earnings is
for the earnings to be as close as
possible because you’re taking more risk
so when we rate a company we look at the
next two years earnings um and you so
what we found is um and the bigger Drive
the biggest driver you know what’s
what’s the greatest correlation between
a share price and anything we believe
it’s earnings per share growth I mean
they’ll say uh um cash flow return on
Equity but all the studies I’ve seen is
you it’s share price and EPS growth so
therefore it’s our ability to work out
what that EPS growth is that’s sort of
the
investment philosophy or um or thesis
from the very early days so we’re got to
be we’re going to be right with those
earnings so to get those earnings right
you know when you’ve got a when you know
a company’s making a widget you know how
much it costs them to make the widget
you know they’re selling the widget for
a certain price and then the difference
between you know the cost and what they
sell it for the revenue is the profit
now if that widget you know that they’re
selling happens to be um you know some
copper and then you you don’t quite know
what the copper price is and you haven’t
really got uh you it’s just another risk
you’re taking make a that Pro bet
correct yeah it’s just and and so that’s
why we’ve tended to you know we think
you I mean Australia’s Got enormous
competitive Advantage you in terms of um
you know in in mining in mining globally
so you how do we get exposure to that
and it was you particularly in the early
days and when we didn’t have the
expertise um even though yeah I I think
I was the I think I might have been the
uranium ass analyst it it it a three-man
team in
1980 but um yeah and I was the all shell
analyst yeah when Central and Southern
you with the you two of the big top 10
companies yeah back then as well um so
that’s why we’ve sort of gone down well
how do we get exposure well what about
mining Services we want to play mining
we haven’t got the
expertise uh you know since you Cooper
and will have joined us obviously now
you we’ve got a lot more expertise in
the mining side so we can you know we
can look at other opportunities uh so
but that’s pretty much why you know the
mining Services now do you want to go to
specific mining servic stocks I I’ll
pass over to CPS if you want we we’d
sort of spoken about a couple names you
hold a Austin engineering theyve one
that sort of come into a bit of
popularity in in recent times again got
a a strong view on how they’re going to
perform yeah Austin’s one we’ve had a
really good shareholding in we’re we’ve
got a decent percentage of that company
um and have been kind of a shareholder
for suppose the last four years really
with those guys and watching their
transition um and just basically we
really we’ve really backed management
they’ve done a really good job getting C
out their business coming through that
Co environment moving kind of production
up to batam and and getting really good
margins on a lot of their stuff um they
also had a really good acquisition of
main Tech through that period as well
and maybe on the cuser looking at
something else coming up but regardless
of that they’re getting really good um
really good kind of growth through
existing customers repeat customers and
now there’s another opportunity with
oems talking to a couple of the big OEM
providers about providing trades that
could be another meaningful source of
revenue for for Austin it’s it’s just
taking the cyclicality a bit out of that
business and we really really kind of
like how that looks for Austin um I I
still think it’s very cheap at these
levels so yeah it’s one we do own no
worries well thanks a lot for your time
guys Jeff and Cooper thanks for making
the time for for me to come and chat
it’s great to hear your views and hear
the story behind Wilson thank you JD and
it’s great that you know that we could
do this and only because I happen to go
to the US and Twitter and get on Twitter
beautiful cheers guys or actually we
can’t call it Twitter it’s X isn’t it x
one that would take a while cheers
thanks J thanks guys right there you go
the main man himself Jeff Wilson and the
mining guy behind him big Cooper Rogers
uh thanks for coming on Lads if you’re
listening hopefully they Chuck us on
their bloody email distribution list
these hundreds of thousands of retirees
that they’ve got look at us getting a
getting a taste for God’s country MADD
Syne oh mate how good is Sydney mate I
wish all was there with you right thanks
to all the bloody Partners as always we
had Brooks Airways in the Brooks group
and cadr in the show m j d we’ve also
got verify give Grant at verify an email
oh get wet Solutions mate aren’t they
storm and aead sure right DSi
underground Silverstone anytime
exploration service Sheamus Murphy
Legend wa water BS right aren’t they how
good are they at drilling for water and
uranium and uh that is it that is it
money
miners the information contained in this
episode of money of mine is of General
nature only and does not take into
account the objectives financial
situation or needs of any particular
person before making any investment
decision you should consult with your
financial adviser and consider how
appropriate the advice is to your
objective financial situation and needs

Here’s our interview with Geoff Wilson and Cooper Rogers of Wilson Asset Management, one of the biggest players in the Australian funds management world.

JD sat down with the pair to hear how the LIC manager is seeing the current macro landscape, in particular in the US and China, to learn why Geoff has decided to dust off the old Twitter account, and to hear about WAM’s view on how activism will influence the Aussie funds management sector, what various commodities will do from here and a chat about a bunch of stocks.

Thank you to our Podcast Partners:

VRIFY – Transforming the way Mining companies communicate to 3D
https://vrify.com/
Email grant@vrify.com (no e) for more information

GetWet Solutions – Innovative Bladder Tanks for mobile Water storage on your Mine Site
https://www.getwetsolutions.com.au/
Matt.hall@getwetsolutions.com.au

DSI Underground – Supplier of Ground Support Products to the Mining and Tunnelling industries
https://www.dsiunderground.com/
https://www.dsiunderground.com/contact

Silverstone – Energy solutions for your business

Home

kenny@sstone.com.au

K-Drill – Safe, reliable, and productive surface RC drilling
https://www.k-drill.com.au/
ryan@k-drill.com.au

Brooks Airways – Perth’s leading charter flight operators
https://www.brooksairways.com/
ops@brooksairways.com

WA Water Bores – WA’s premier water well drilling company
https://www.linkedin.com/company/wa-water-bores/
James@wawaterbores.com.au

Anytime Exploration Services – Exploration workers, equipment, core cutting/storage plus much more

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seamus@anytimees.com

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——————————-

CHAPTERS

0:00:00 Introduction
0:03:29 Geoff & Cooper on Money of Mine
0:03:40 Geoff becoming a Twitter power-user
0:05:19 Checking in on the USA
0:08:03 How markets look state-side
0:09:25 View on the Australian market
0:10:30 WAM view on the rate environment
0:12:28 Large cap vs small cap
0:15:05 The state of the LIC market
0:17:19 Shareholder engagement vs performance
0:21:37 Meeting management
0:23:28 Activism in the LIC market
0:25:15 Optimal size for WAM’s strategies
0:27:45 Trading at NTA
0:29:08 Company buybacks
0:30:26 WAM’s investment style
0:35:25 Should mining co’s moats deserve more credit
0:37:27 Would WAM open a Resources LIC?
0:39:38 WAM’s China view
0:43:35 Copper on the ASX
0:48:18 Will lithium’s recovery continue?
0:54:45 Are WAM uranium bulls?
0:58:53 Gold’s decoupling from real rates
1:03:30 Value in mining services

——————————-

DISCLAIMER

All Money of Mine episodes are for informational purposes only and may contain forward-looking statements that may not eventuate. The co-hosts are not financial advisers and any views expressed are their opinion only. Please do your own research before making any investment decision or alternatively seek advice from a registered financial professional.