Hello, and welcome, shareholders and investors. My name is Geoff Wilson, and I'm the Chairman of Wilson Asset Management, also the Chairman of WAM Capital. Thank you for dialing in to the webinar today. There's myself, and Oscar Oberg and Olivia Harris, who will be, you know, answering your questions, and trying to give you as much feedback as we can. In terms of the number of people that have, you know, registered for this webinar, it, it is a, a very large, you know, it's, you know, a little over 1,000. There'll be a lot of questions. Yeah, we'll. The presentation will go for, say, probably 10, 15 minutes, and we'll try to have the rest of the time open for questions. If we do miss you, please, you know, you're there because you're our shareholders, you know, please email us or contact us. You know, obviously, there'll be some of the people on the call that actually may be our competitors, so we won't be answering your questions. No, look, thank you, thank you very much, everyone. In terms of the result, you know, we announced the result yesterday. You can read it in detail. Yeah, as we try to be in contact with, as many of you as we can, we try to get a bit of an idea of what you're, what you're feeling and what you're thinking. In the announcement, we tried to give you really as much detail as you could as we could, for you to, you know, put the pieces of the puzzle together. In terms of, you know, probably, you know, what I would like to do is just focus on, you know, some of the, the, you know, the, the questions people have asked me. You know, obviously, you know, people have, you know, made some very, you know, some positive comments about, you know, the continued outperformance of the portfolio, you know, over the last four years. There's been a, you know, also, there's been a number of questions about, you know, well, let me just put them into various categories. You know, there's a lot of shareholders, I suppose, including myself being one, feeling some pain because, you know, say, we bought our shares in the $2+ range, and then, you know, where they're trading at now, and I, and I'll, I'll, I'll address that. Also, there's been a number of shareholders, you know, questioning about dividends, and the ability to continue to pay, you know, high fully franked dividends. I'll talk about that. Obviously, about the, where the share price actually is trading at, at the moment. You know, we. As it was trading at a, a, quite a, a large premium to NTA, now it's only a, a lot smaller premium to NTA. And I'll cover, I'll cover off on that. As you, as I mentioned, you know, there's been a number of people have, that have talked about performance. Now, that's performance of the underlying, underlying portfolio. You'll see, we'll send the slides out to you all after this presentation, and we'll announce them on the ASX, you know, tomorrow. Yeah, you know, they'll all be available there. I, I suppose the first thing is when people invest. Well, actually, I think, Olivia, do I probably need to do a disclaimer. We've got a disclaimer slide. Basically, you know, if you can, you know, we'll just flip it up on the screen. If you can all read that. Is it there somewhere? Yes, it's on. Oh, perfect. Okay. So, that means, you know, we can't give you specific advice. The advice we'll give you is, is only general advice. If you, if you look at. We'll put up the slide where it shows you, where the portfolio is invested, and that's, that's the slide, you know, showing you, you know, just, just where the, you know, the weightings of various categories of companies. You know, where the All Ords, you know, if you, if you bought the All Ords, where you'd be, you know, what companies you'd be weighted to. If you bought the Small Ords, what companies you'd be weighted to, or have exposure to, and then where WAM Capital is invested. To me, it's very important that shareholders understand that. Yeah, you can see by that slide where the bulk of the money of WAM Capital is invested in smaller companies. You know, a very high weighting. It's really smaller micro-cap. You know, a higher weighting, you know, to those categories than even the Small Ords. As a shareholder, what we're expecting there is, you know, the smaller you go to companies, you expect higher risk, but you also would like higher returns. I'll come back to that, and Oscar will probably talk to that a little bit later. But in terms of, you know, the, the, the various concerns that people have been having, when the board of WAM Capital made a decision when COVID started, then we were paying a AUD 0.155 fully franked dividend, yeah, for the 12-month period. This is going back to the 2020 year. The board made a decision then. A lot of companies were cutting their dividends. The board made a decision then saying, "Okay, we might be going through a rocky period, but we're very comfortable in keeping that dividend. You know, we have retained earnings, and we have franking credits. We'd prefer those franking credits to be in shareholders' hands, so we're very happy to keep the dividend at that level." Over the following four years, and we'll show you, I mean, there's a slide in the pack, I don't think we need to put it up now, which just shows you how the portfolio performed over those four years. There was, you know, quite a bit of volatility. There was a year where the where the portfolio was down, you know, 8%+. Of course, you know, we're, we're also, you know, we're paying to you, shareholders, we're giving you AUD 0.155 fully franked, which on the current asset backing is over 10% fully franked. We have to make 15% pre-tax, pay that, you know, four and a bit percent tax, we can pay out that 10.5% fully franked. We've been. That, you know, the first year, the first full year of COVID, you know, the portfolio was down 8%-9%, so we lost, you know, AUD 0.35-AUD 0.36 of NTA. Plus, we paid you an AUD 0.155 fully franked dividend. We've been paying you that yield of, you know, say, at the after-tax level, you know, fully franked of 10.5%, but at the pre-tax level, close to 15%, you know, for the last four years. When you're, you know, in terms of as fund managers, you know, what we're trying to do is, on your behalf, is outperform, you know, with the capital you give us, and we're hoping to do the market plus a little bit better. Over that four-year period, you know, the yield on the, on the market was about, I think, 3.7, 3.8%, and I think it was about 60% franked. We're giving you a, a significantly higher fully franked yield. In terms of return, some shareholders are saying, "Well, look, why. You know, I bought in the, you know, AUD 2 level. It's now trading, you know, significantly lower than that. What's happened?" Well, I mean, if you look at the last 12 months, you know, 12 months ago we were trading at a, you know, 22% premium to NTA at June last year, and now WAM's only at a 5% premium to NTA. Olivia, did you want to put that slide up? Just shows you the cyclicality of the premium and discounts to NTA. That's, that's been one factor. The other factor, the reason why, you know, the, the share price has come down is because we've actually been paying you super profits, in terms of. You know, normally you expect, say, to get a, you know, 9% or 10% return pre-tax from investing in the market. If, you know, we're good fund managers, we're gonna do a bit better than that, but we've been giving you, you know, effectively 15% pre-tax. That was a board decision to keep the dividend high. You know, if the portfolio is down, say, you know, the, the first year of the GFC, the portfolio is down 18%, you know, then also you've got a situation where you're paying effectively 15% pre-tax, so that's 20. You're about, you know, you know, the portfolio is down 35%. Even if the portfolio bounced back, it's that the additional fully franked dividend that we've been paying you every year, but at a pre-tax level is, is easing the capital. To me, you've got to add that dividend back, and you've got to add that franking benefit back for you to get the, you know, to fully understand, you know, then, you know, then, then what's, you know, what's happened. That's to me, that's, you know, very important. The plan is, from the board's perspective, is while we can keep paying you these high dividends, then, you know, then we'll keep, you know, delivering them to you. Now, you'll see, you know, in, in terms of in the announcement, we talked about, you know, if we can deliver, you know, really we need to deliver a 15%-16% pre-tax return to provide those dividends to you. One of the positive things is, in July, when WAM Capital did a, you know, yeah, Oscar and his team did a great job. The portfolio was up, you know, a little over 3.5%, you know, beating, beating the market. So far this month, you know, even though it's been a tough month for the market, the portfolio is a couple of% ahead of, you know, the market. You know, which is, which is positive, and we'll talk to that a little later. To me, you know, that sort of covers off a little bit, you know, and going from that premium to discount. You know, will we get back to a premium? We've always said what we like to do is buy AUD 1 of assets at AUD 0.80. We like to buy, you know, discounts to NTA, and that's what we'd encourage you to do. You know, would WAM Capital go back to, you know, the premium it was one day? You'll see from the chart, the probability is, you know, if we continue to do what we're doing and continue to deliver, you know, then, then that will that will occur. Now, what I'd probably, you know, touched on. Well, I haven't touched in detail on performance. Actually, Olivia, if we go to, I've touched on discount. Yeah, obviously, the discount to end, sorry, the premium to NTA has reduced significantly, and that's been a negative impact. I've touched on the fact that we've been paying a very high, fully franked dividend. Yet really nearly a super dividend in terms of if you look at it. What we need to do, you know, to, you know, continue to deliver that to you, and our plan is, you know, we'd like to continue to do that. I've touched on a little bit is, you know, why the share price has gone from that high, you know, from those AUD 2 levels to where it is now. It's, you know, twofold. There's one is contraction of premium to NTA, and the second one is, you know, we've actually, you know, even though it's been a tough period, and we have had some really good performance, we've been paying out a significant, a significant dividend, compared to what the market does, or any other, you know, most of our peers in, in a, a fully frank basis. Olivia, if you just wanna. Have, have we shown that premium to discount chart? Yes. People get a little bit of an idea about that. What I'd like to do now is I'd like to pass over to Oscar. You know, there has been a lot of questions that have come, and well, initially, where Olivia will go back, and Olivia will start asking Oscar and myself some of those questions. To me, actually, the, the one slide I'd like to finish on before I go to Oscar, Olivia, is just the performance slide where we've put the performance of the. This is since COVID, where we put the performance of the WAM Capital portfolio, and then we've shown you the performance of the All Ords, and also we've shown you the performance of the Small Ords. You'll see that, that by the, the slide we showed you earlier is how the portfolio is positioned. It really has more, yeah, a skew to the micro-cap part of the portfolio. If you look at the, how the portfolio is positioned and the performance of all those periods, there's 8 periods of four years for each of the indexes, that Oscar and his team have outperformed the Small Ords or the All Ords in 9 of those. Sorry, in seven of those eight periods. To me, I think Oscar and his team have done an exceptional job. I think the reason why the share price is where it is, it's been the contraction of the premium to NTA, and it's been the fact that the board decided to keep paying those very high dividends. So we're because those dividends are paid out of you know, the profit reserve is a combination of retained profits, you know, realized profits, and unrealized profits, and, you know, because we decided to keep it that level, we ended up paying out a number of the unrealized profits. You know, you, as investors, have got the, have got your capital back at a fully franked, on a fully franked basis. That's where some Like, if we had halved the dividend, if we'd halved the dividend at the start of the GFC, then the, then the NTA would be nearly 30% higher, and the share price would nearly be 30% higher. We still would have been providing you with a dividend of, of about 60% higher than the market was giving you on a fully frank basis. I'd like to now pass over to Oscar, who'll talk to you about, you know, what, what's, you know, what are you doing, you know, with your money. Thank you very much. Yeah. Thanks, Geoff, and good afternoon, everyone. Look, before I start, I'd like to reiterate Geoff's comments. As a team, we take great pride and responsibility in managing your, your money within WAM Capital. I guess as fellow shareholders, we too are disappointed about how the share price has, has performed over the last 12 months. As a reminder, the WAM Capital investment process is focused on identifying undervalued growth companies with a catalyst. The six of us within the WAM Capital team see over 4,000 companies a year, with the vast majority of these companies focused in the small cap space, as Geoff, Geoff, Geoff pointed out. Over the past 25 years, we've chosen to invest in small caps because these companies tend to be under research and generally have a catalyst that can drive the share price higher going forward. As Geoff pointed out, as it stands today, within WAM Capital, we have effectively zero exposure to large cap companies, which we define as the top 50 companies within, within the market. As you can see in that slide, I think it's slide five, the top 50 companies within the ASX actually make up around 70%, of the Australian market. Despite a challenging 12 months, we're pleased to report that the portfolio outperformed, over the 2023 financial year by just over by around 3.5%. This was a great effort, given small caps underperformed for the second consecutive year running, with the headwind being just over 5% for the year. Our contributors to the portfolio included aged care operator Estia Health, which had a takeover bid in, in late March, and thankfully, that takeover looks like it'll it is about to complete. Also, vessel operator MMA Offshore, which upgraded earnings several times throughout the year. As is common every year, we do have a lot of detractors, and one of the largest detractors was Maas Group, which is a building materials company focused in regional Australia. The reason why that, that was a detractor, it had a number of earnings downgrades, largely due to the bad weather in the first half of the financial year, but we still own the business. We think the market value of Maas Group's property is actually well above the share price, which means we're getting the operating business for free, we actually see a very positive outlook for the company over the next two years. Now, over the last 25 years, we've had many periods where small-cap companies have either underperformed or outperformed the broader market. Now, unfortunately, over the last two years, it's been a very tough period, where small-cap companies have underperformed the market extensively. You can see this in slide seven of the presentation. You can see that most of this underperformance began in the March 2022 quarter, which was the start of the Russia-Ukraine War, also the start, really, when inflation started kicking off. Furthermore, capital markets activity has been really, really slow in the last two years. And we have really haven't done many deals at all, and this impacts the market-driven side of WAM Capital. If you have a look at the 2023 financial year, we only participated in 20, 20 deals. In 2021, I think it was close to. So it was about 65, and in 2020, it was over 70. It was a big contraction in that part of the portfolio. Now, pleasingly, we're starting to see light at the end of, end of the tunnel for small caps. The most important thing that we've seen in some time was actually in the June quarter of 2023, was actually the first quarter that small cap industrial companies, which is what largely what WAM Capital invest in, actually outperformed the market for the quarter. It's a really positive sign, and this has continued on into the 2023 financial year. The sectors that we think look very interesting at the moment are those sectors exposed to the economy, and that's sectors such as retail, automotive, media, and building materials. It's because these sectors have been hit really hard in terms of the share prices over the last few years, and valuations look very attractive. These sectors are very important for the small cap market because these sectors actually contribute around 30% of the small cap benchmark. For small caps to outperform and do well, you need these sectors to go well. An example of the value and the opportunities we're seeing, I thought it'd be good to talk about Harvey Norman, which is a company we'll all know. It's a retailer in household goods. In June, the share price of Harvey Norman reached lows that were actually below the value of their property. In fact, we've only actually seen this happen. This is the third time we've seen this happen over the last 15 years. What this means was, when we were buying shares at Harvey Norman at around AUD 3.20 a share, we were actually getting Harvey Norman's retail business, which does over AUD 400 million of profit, for free. What's more, we need a catalyst to invest in WAM Capital. If you look at Harvey Norman, the analysts that cover the stock have in their forecast for the company. If we look at 2025, which we think is the, probably the most normal period, we can, we can, we can benchmark to, the numbers there are actually lower than what they were before COVID in 2019. Now, in our view, the current environment, and as we go into 2025, we feel it's a lot better now than what it was in 2019, and we actually think Harvey Norman's taken a lot of market share over that period. In our view, we think we're going to enter a pretty good time for Harvey Norman and for a number of the other retailers, because earnings are too pessimistic, they're too negative. We think we're going to enter into an earnings upgrade cycle, and this should fuel the share price. As Geoff touched on, there is a while to go in the August reporting season, so I'm not getting too excited. Pleasingly, you know, it does feel like the market is turning towards small caps, and in particular, those stocks exposed to the consumer. Companies such as Nick Scali, Bapcor, GUD Holdings, Baby Bunting, have all performed above expectations, which were, were negative and actually now slightly better, and seen the share prices go up as a result. As Geoff said, we've outperformed over the first six, seven weeks of the financial year, and also the, the portfolio was up just a tad over 3.5% for the month of July. In conclusion, we're very positive about the outlook for small caps. We're seeing a lot of opportunities that fit our investment process. Look, I'd love to obviously take the opportunity to thank all the shareholders, those on the call and not on the call, for all your support over the last few years. The team really appreciates it. I'll now pass it on to Olivia, and we'll, I guess, get rolling on the Q&A. Thanks, Oscar, and thanks, Geoff. Thanks to everybody who is sending your questions through. Please keep sending them. We are working through them in the background. Geoff, I know that you've touched on the share price, but we are getting quite a few questions through from Matthew, Ian, Jeff Swan, Daryl, just to name a few. I thought you could perhaps discuss that contraction in the premium that we've seen. Could you maybe talk through how LIC can trade at a premium and a discount to NTA and what you've seen with WAM Capital? Yeah. Can we put that slide up? Yes. Yes. The, the, the premium and discount to NTA. Yeah. If you look at that slide, you know, when, when we floated WAM Capital, you know, 24 odd years ago, for the first couple of years, we traded at a discount to NTA. You know, then, when, you know, that's when the people that put their money in the start weren't quite sure whether we'd perform or not. We ended up performing really well for the first couple of years. Then, you know, then we started paying reasonable-sized dividends. You know, then the share price moved up to NTA and then went to a premium to NTA. Over the last. You know, the, and then you'll see, you know, that we got up to, I think, at the highest premium to NTA was, you know, three or so years ago, and it was a little over 30%. We're managing AUD 1 of assets, trying to get a performance on AUD 1 of assets, and that AUD 1 of assets, you know, if you'd understand the premium, is trading at AUD 1.30. What's happened in the last 12 months, you'll see on the Actually, do you want to put that, the slide up, you know, the, the slide that shows the various performance, you know, the total share return, et cetera, et cetera? You know, the, the performance of the portfolio, you'll say, "Hold on. You, you're talking about how good the portfolio has performed," and then you look at the total shareholder return. See on that slide where it says, you know, for the 12 months, that's June to June, we're down 4.5%. That is with paying a 15.5% fully franked dividend, and that's not l ike, a lot of people, you know, I know 60% odd, 60%-65% of our shareholders are self-managed super, and they get the franking credits back. That isn't putting a value, you know, of sort of AUD 0.06 or AUD 0.07 on those, on those franking credits. I'd say probably, if you probably put the value of the franking credits in, then you, you're probably down over, over that period, 1% or 2%. You're saying, "Hold on, why am I down, you know, when the portfolio is up and the market's up?" Even then, you're telling me the portfolio performed better than the market. It's actually the fact that we were at a, you know, a 22% premium to NTA, and that premium has declined to about a 5%. Now, why do you trade at premiums and discounts? I mean, it, it is the market. You know, it's really supply and demand. And, you know, from various points in time, you know, we have traded at discounts, in various points in time, in premium. Now, will we go to a discount at some point in time? Yeah, the odds are we will. Now, will we be trading at a higher premium to NTA at some point in time? The odds are we will. Now, what does a company need to do? It needs to perform. It needs to provide a good dividend, fully franked dividend stream, because the marginal buyer tends to be self-managed super funds. It needs to, you know, treat shareholders fairly, and I suppose that's all companies need to do that. The fourth thing is, it needs to have a really detailed shareholder engagement communication strategy. That's where a lot of listed investment companies that floated over the last sort of five or six years have tended to go by the wayside because they really haven't committed the resources. We have, you know, in that shareholder engagement, you know, you know, communication, marketing, strategy, we probably. You know, we've got 11 or 12 people in that area. You know, that's a, that's a reasonable, you know, AUD commitment. That's broadly what you need to do. You know, the, you know, why is the share price, the total shareholder return, you know, not been good? It's because we were at a very high premium, and now we're at a very small premium. Now, if the premium had stayed the same, then you would have got the, you know, just the performance of the underlying portfolio, minus the fully franked dividends. Because a lot of people and, you know, I know even, you know, some, you know, some sort of professional investors that, that I know, not, not stock market investors, but professional, you know, property investors, et cetera, don't realize that when you pay a distribution or, or a dividend, it has to come from somewhere. Yeah, I think we've got some questions a little bit later about the sustainability of that, but I'll leave that there, and I'll wait for those, Olivia. Thanks. Thanks, Geoff. given that we do have quite a few questions on the sustainability of the dividend, we've got some from Rosalind, Lyle, Sterling, Bruce, Michael, and a couple others. I might stick with you and ask you just to talk through the profit reserve. maybe you can talk about how that works, what, what the profit reserve actually is. I know you touched on that earlier, but just to reiterate, and what the outlook is for future dividends. Yeah. What we do is on our monthly NTA. I mean, we've had profit reserves, you know, since WAM Capital has started. You know, Before COVID, when we were doing our 6 monthly roadshows, you know, now it's once a year. We were communicating to shareholders what the profit reserves were, and we thought: Look, let's just make it very simple, and let's announce the profit reserves with our monthly NTA. All, all shareholders know exactly how much is in the profit reserve. What the profit reserve is, broadly, you know, say, if we start with the company floater starts with AUD 100 million. The value of that AUD 100 million goes to AUD 110 million after tax, you know, so increased by AUD 10 million. What the company, what we do is we put that AUD 10 million, it may be realized or unrealized, you know, if it's in a we look at it monthly, and then, you know, the board decides to put that in a special reserve. You know, that's, that's where the profit reserve comes from. Our ability to pay a dividend, you need. It needs to be retained earnings or comes from a reserve, and that's why we've created the profit reserve. Then for that dividend to be fully franked, we need to have franking credits. Then, we get them by paying tax or getting fully franked dividends. The bulk of the franking we get is by paying tax. We have been fortunate, we've done a number of takeovers over the years, and some of the companies we've taken over, you know, the primary benefit we make the primary reason for those takeovers is because we get a better return, you know, than just being in cash. They've always delivered for NTA, they have increased the NTA of WAM Capital. If we hadn't done any of those takeovers, the NTA for WAM Capital would be lower than it currently is. Also, in some of those takeovers, the secondary benefit has been, you know, there's been franking credits there as well, which we've been able to pass on to shareholders. That's, that's the profit reserve, and then our ability to continue, you know, paying the dividend because the board decided at the start of COVID not to cut the dividend when people were. Because the portfolio fell, you know, then, you know, then the, you know, the, the, the yield we were paying out is a lot higher. Some people, you know, might ask the question, well, you know, the question is: How sustainable is that? If, if you go back to 2022, you know, for that year, that was a tough year in the market. You know, you'll see that on the performance data, you know, we're down that 18%. That, that was AUD 0.35. The, the AUD 0.356, the NTA dropped by. Even if the, even if the premium of the NTA stayed the same, that's what the NTA dropped by. We paid out AUD 0.155, fully franked. To pay that AUD 0.155 fully franked, you know, we would've needed probably another AUD 0.06 of tax we would've had to pay. That's where all of a sudden there's, you know, AUD 0.56 of NTA. That's the performance. If you look at in 2021, the year before, you know, when I think At the end of 2020, 2020, the NTA was about AUD 1.59. In 2021, you know, Oscar and his team had an extremely good year. The portfolio increased by, you know, AUD 0.54. All of a sudden, you know, the NTA has gone from, you know, AUD 1.60, you know, to AUD 2.00, you know, AUD 2.14. You know, then obviously, then, then the dividend you're paying out, you know, say the AUD 0.155, you know, on AUD 1.59 versus, you know, AUD 2.00, you know, a little over the AUD 2.00 level, the, the yield drops down. You know, our ability to continue to pay fully franked dividends is our ability to continue to grow that profit reserve. Back in 2000, we thought, you know, like we might, you know, be going to have to cut that dividend. We've been able to, you know, continue to make profits, and to me, I take my hat off to Oscar and his team, because if they'd only performed in line with the market, you know, then, then we wouldn't have the profit reserve or the ability to pay the dividends we currently have. That's, I think that covers that off, Olivia. Like, there's been a, you know, a number of people that have sent these questions in. There might be nuances in that answer that you want more clarification on, or you'd like to ask an additional question. You know, please feel free to, you know, send them in, because this is. You know, we're here, we're reporting to you. It's your company. You own the company, and we'd like to, you know, allow you to fully understand, you know, what's happening and how it's operating. Thanks very much, Geoff. Oscar, we're gonna turn to you now for a couple questions. We'll stick with you for a bit. The first one that's come through is from David: Do you have any views on AMO? I think that's Ambertech. Yeah. Thanks, David. look, we came across it a few years ago. I think it had a good year sort of coming out of COVID. I think it was a distributor of AV products from memory. it was very very small for us. We haven't seen them for a long time, so I must admit, I don't have a view on them at the moment, but always happy to learn about some new, new companies if, if you'd like to have a chat at some point. Yeah, so sorry, I can't really give you a good answer, but yeah, yeah, unfortunately, I haven't seen them for a long time. Thanks, Oscar. The next one is from Graham: Will you be investing in the private company, Aegros, who are in competition to CSL? Yeah. The, the answer there is no. We only really focus on listed companies, and as we sort of discussed before, we focus on small cap companies. CSL, you know, had had certainly in my time in Wilson Asset Management, it's never been in the portfolio. That's probably more WAM Leaders', domain, is a company like CSL. Thanks very much, Oscar. The next one, this is from Steve: Is City Chic a company you would consider for the portfolio at the current prices? Yeah, it's been a funny one, this one. You know, it was our best stock for about, oh, God, two or three years in a row, really, across WAM Microcap and WAM Capital. You know, obviously, had a huge COVID bump. You know, and we got it wrong, you know, one of our worst stocks really last year. You know, being top 5 worst stocks last year. Interestingly enough, they, they, they sold their troubled European business recently, over the last few weeks, and they're conducting a strategic review, which is always code for, you know, we're selling assets and and reducing debt off the balance sheet or reducing inventory. We bought a small position in in WAM Microcap. It's really too small now for WAM Capital. It's the market cap's fallen a lot, or the share price has fallen a lot, I should say. Yes, we've got it there, in there as a small, small weighting within the micro-cap portfolio. We'll wait and see what the management and the board come up with, with the strategic review at the result, which I assume is next week sometime. Thanks, Oscar. That's great. Geoff, we've got one for you from Warren. What are your thoughts on Magellan? Magellan Financial Group, there's, you know, there's probably two listed Magellan Financial Group vehicles on the stock market. There's Magellan Financial Group, the fund manager, and then, then there's a listed investment trust that Magellan Financial Group has. In terms of Magellan Financial Group, the funds manager, yeah, obviously, they had a very difficult period with significant outflows. Yeah, the, the, you know, we actually don't own it in. Probably where it would fit would be more likely in WAM Capital. I know Oscar and his team went to, you know, did a company visit recently. We, you know, obviously, what we're looking for is undervalued growth companies, with a catalyst that's gonna change the valuation. Yeah, I'd assume, well, you know, Magellan Financial Group is probably doesn't come into that category of an undervalued growth company. Whether there's more a trading opportunity, you know, where the catalyst will change the valuation. There has been a bit of noise, you know, activists, you know, giving the company a bit of a hard time. You know, to me, yeah, we don't own it. You know, could there be an opportunity? Yes, there could. In terms of the listed investment trust, you know, which trades at a discount to NTA, we actually bought that in, you know, WAM Strategic Value is a shareholder in that. It makes up about 5% or 6% of WAM Strategic Value's portfolio. You know, WAM Strategic Value started buying that at about a 20. Well, was buying it at around the 21%-22% discount to NTA, now it's trading at about a 12% discount to NTA, and haven't been buying any recently. The, the, the catalyst, you know, the catalyst from WAM Strategic Value's perspective is they think that at some point in time, there'll be, there'll be it'll, it'll trade to, you know, very close to NTA. It's, you know, it's already been a good investment. You know, the WAM Strategic Value shareholders hope it becomes an even better investment. Thank you. Thanks, Geoff. Geoff, we'll stick with you for the next one, which is from Connor. He has stated that, WAM does form a large part of his retirement nest egg. Like you said, we have, we have a lot of self-funded retirees as shareholders. He's asked, "Is it time to jump ship to a low-cost ETF?" Maybe you could touch on your thoughts on ETFs for a second. Yeah, I mean, the really, it could well be. You know, like, to me, we're, you know, we're not, you know, we're a management company on your behalf. You know, we're not gonna tell you to buy or sell it. You know, that, that has to be your decision, and you've got to weigh up the pros and cons of the two. You know, one is, you know, as I mentioned, that WAM Capital is now trading at about a 5% premium to NTA. So if you buy an ETF, you're actually getting it at NTA. Now, the ETF, you know, you'd assume, or you'd hope, that the ETF would give you the performance of whatever market you decided to, to invest in. So, and the dividends you'd get would be. Well, if you did an indexed ETF, then you'd get a yield of about, was it 3.7% odd? You know, which the market's giving you at the moment. That would be, I think it's 56% franked. If you want a really small amount of franking, and, and you want that market risk, yeah, then that's then an ETF gives you that. You still get market risk with WAM Capital. As I said, you are paying, you know, a 5% premium. You're, you're getting a significantly higher yield at the moment. The question is: Can we continue to deliver that? Like, if, if, if I had a clear crystal ball, which would tell me exactly what we're gonna do, then I, I would, I would tell you. You know, the dividend we deliver to you will depend on our performance. To me, it's just not a, it's not a black-and-white decision. That's probably the factors that if I was you, I'd take into consideration. Thanks, Geoff. The next question that we have is from Roderick. Roderick has two parts to his question. One is on the economy, which I'll give to Oscar. Next is for Geoff, which is back to the dividends. Oscar, Roderick has asked: "In a recent business meeting, it was said that we are currently in a stage of the business cycle, which is why the share price has declined." Can you maybe comment on where you think we are now in the economic cycle, and maybe what your outlook is for the Australian economy? Yeah, I'll talk about sort of the, the economy, and how that relates to the fund, which I think the question is. Yeah, I mean, I was just talking then, you know, about five minutes ago, about how we're really bullish on sectors exposed to the economy, such as, you know, automotive, retail, et cetera. Now, clearly, that seems a bit odd, given, you know, all the negativity we're seeing in the papers and on the TV and so forth about, you know, the upcoming recession costs, you know, the, the switch from fixed rate mortgages to variable, et cetera. That's right. We think it's, we're gonna enter a very hard period for companies, there's no doubt about that, and we're seeing that in the, in the current results. The beauty about what we do for our job is the market always looks 12-18 months in advance. You know, the example I gave for, say, Harvey Norman, for instance, this year, I think, you know, they'll do around AUD 400 million of profit, I think it is. The year before, they were doing, they were doing well over AUD 600 million. If we look for the analysts that cover the stock, we've got profits declining for the next two years. What we've seen this reporting season is actually a number of the companies that are exposed to the economy, the numbers haven't been as bad as expected. Because these companies are very cheap and their share prices have already fallen quite a lot. we're seeing the share prices recover because effectively people are looking through the cycle, looking forward and going, "Okay, well, yes, we understand this period is going to be very difficult, but maybe in this, you know, as we get to the new year of 2024 and into 2025, things are going to get better, and we're going to see growth again." That's sort of what we've been aiming for in the portfolio. And as I said before, that's exactly what's played out. Another example is Nick Scali. You know, that they did a profit just over AUD 100 million for the 2023 financial year. The analysts that cover follow the stock had profits falling to AUD 70 million and then AUD 70 million the year after. Now, Nick Scali had a great result. Synergies are coming through. It wasn't as bad as people feared, and those numbers have gone, Instead of 70, they've gone up to 75 and now 85, and as a consequence, the shares are up, you know, 20%-25% over the last few weeks. That's, we're in the game looking forward. And certainly, if, you know, Geoff talked about our performance versus the small cap benchmarks, you know, over the last 12 months. Stocks exposed to consumer have been a very low percentage of the portfolio, and that's one of the reasons why we actually outperform the Small Ords index. We're now going into a period where we think those stocks are cheap, they've got catalysts. We think the share prices are too low and are due for a rebound. That's what we've positioned the portfolio in into this reporting season. Don't get me wrong, the economy's going to have a very tough period. Last thing I'll say, I've been talking too much, but last thing I'll say is all the feedback we get on the ground is we just need confidence. The consumer just needs confidence that rates are going to stabilize. I think from our perspective, we're not even looking for rates to fall. We just need them to stabilize, and people can readjust their budgets and then sort of start again. How about I leave it at that? I might draw out a few more questions. Yeah. I'll leave it at that. That was great, Oscar. Thank you. We appreciate all the detail. Yes, I will stick with you just for one more question before we get to that second part of Roderick's question. You very quickly touched on interest rates. We've had questions from Gary and Vladimir. What do you expect the RBA to do next? Good question. I must admit, I thought they were going to pause back in April, and I got that wrong. Look, I still think they're going to pause. I really do, because I think there's just so much uncertainty with what this fixed to variable shift in mortgage rates will, will happen. I mean, it's interesting to see sort of the cohorts of, I guess, the demographics that are really being impacted now, and as the younger people are getting really hurt with rental increases and, and, obviously mortgages and so forth. Actually, older people are doing quite well through this period, so it is, it is quite a divergence. Yeah, overall, I think there's still too much uncertainty. I think as well, what we see on the ground as well is, you know, this has come up this reporting season, is a lot of the logistics and freight costs and sea freight and ocean freight, et cetera, which has been a big driver of the inflation over the last two years, is now really starting to come off and is actually now back at pre-COVID levels. So I think, you know, we're starting to see, I think yesterday with the jobs number, with wage growth was slightly lower than expectations, 3.6%. It's starting to normalize, which is great. We think they've done enough, at least at this stage, in relation to cash rates. Look, we think they'll be on hold. Thanks, Oscar. Geoff, back to you just for that second part of Roderick's question. Can we continue to pay out such a high dividend, or will it dilute the shares? Thanks for the question. It, it actually. Yeah, say if we were. Let me give you an example. Say we've got AUD 1 of assets. Oh, yeah, at the moment, you know, say we've got AUD 1.45 of assets, and we're paying a fifteen and a half. Over a 12-month period, we're paying an AUD 0.155 fully franked dividend. Like, that comes from the assets. Effectively, you know, for us to pay that dividend, if it's fully franked, we would have had to pay either received, you know, AUD 0.155 per share in franking credits from other companies, which we don't, or paid tax, you know, paid, you know, six or, you know, what is it? No, it's, yeah, about AUD 0.045-AUD 0.05 of tax to allow you to, you know, pay that, pay it as a fully franked dividend. Yeah, it would reduce your NTA by the amount of dividends, yeah, that you pay. As I mentioned earlier, that if the board decided, you know, at the start of COVID, where everyone was cutting their dividends, if the board halved the dividend, then the NTA would be, you know, is at 27.9% higher now. Like, the NTA, instead of being AUD 1.42 at the end of June, would be AUD 1.82. You wouldn't have received, you know, AUD 0.31 in fully franked dividends. You know, if you over those four years, you've received, you know, effectively AUD 0.62 in fully franked dividends, which to pay out AUD 0.62 fully franked is, you know, you've effectively got to pay another, what is it? You know, about three by six, three, about AUD 0.18. You know, there's we would have had to make about AUD 0.80, AUD 0.80 at the pre-tax level to do that for shareholders. Now, if we didn't pay that out, the NTA would be AUD 0.80 higher. But then you probably wouldn't be that happy. Thanks for that, Geoff. Oscar, the next question is for you from Greg. In terms of agricultural companies in WAM Capital's top 20, could you please explain why you hold Ridley and Select Harvests, and not Elders or Nufarm? Good question. I must admit, I ask myself every day why we own Select Harvests. Anyway, the simple, simple reason is, look, Ridley and Select Harvests, we always wanna own Like, the starting point with agriculture is, you know, you want to own these companies when it's really dry, and you want to sell these companies when it's effectively really wet. Now, I know that sounds very simple, but that's just fact. Elders and Nufarm went through an incredible period through COVID, both companies. You know, there was a big shortage of, of chemicals and, fertilizers and so forth, which drove a lot of pricing, price increases, and both companies, really benefited from that. If you think about the east coast of Australia, is, you know, effectively had amazing conditions, really, for some time through La Niña, and actually, you know, feels like we're entering into El Niño now. Both those companies, you know, particularly if we focus on Australia, probably had profits that were probably. They were super profits, effectively. We did really well out of Elders through 2020 and 2021. We sold it. We liked the business, nothing wrong with it. Same with Nufarm. We just thought they were at peak earnings. On the flip side, Ridley and Select Harvests. Ridley basically is a manufacturer of stock feed for animals. They clearly, there's been great conditions on the ag side, so there's less demand, let's call, for feed than what there would be in dry times. That's a good starting point for that business. In Select Harvests' case, it's probably the only commodity globally that hasn't seen an increase over this period, which is almonds. That's largely due to because California, which is a large almond producer, well, the largest almond producer in the world, it's about 70% of volume, has had a record crop in 2021, and it's just brought the price down. To start off, now we're on Select Harvests. Select Harvests, the value of their assets is around AUD 6 a share, and it's currently AUD 4.50 today. For us, we're happy to wait there with Select Harvests. We know at some point we'll see an average almond price. They've had a lot of headwinds, this business, then once we see that, we think, you know, we're effectively getting, well, it's about, it's about a 25%, 25%-30% discount to its NTA right now, which is great. Then, once the earnings come through, we think that'll drive earnings upgrades at some point. We're not going to see it as yet, but at some point, we'll see it. On the Ridley side, this has been a turnaround. We've owned the business for just over three years. It's been a great turnaround, with its new CEO. It's got its result tomorrow, so fingers crossed it's a good result. Effectively, if you look at the company, we think those earnings upgrades will continue some cheap valuation of around 12 x earnings, and it has a net cash balance sheet. We do actually think there will be acquisitions in due course. Long answer again, hopefully that gives you a flavor as why we own sort of Ridley and Select Harvests over the other two. Thanks, Oscar. Geoff, we'll go to you next. This next question, I think you actually had a whole other webinar on, but it's from Gary. Could you discuss what is the legislation agenda for franking credits? Yes. Maybe you want to just touch on the advocacy that we've done recently. Yeah, and, and sorry, the, the exact question? Because I just want to make sure I answer the question. Yeah. he said, "What is the legislation agenda for imputed credits? Oh, right. Yeah. Yeah. Okay. It's gone through it's waiting to go through the Senate. There's two parts to the bill that we're, yeah, we think the current government is making a big mistake with, and that's the, you know, chapter 4 and chapter 5. Please, if anyone is in. Well, it needs to go through the Senate. It looked like it was on the agenda to go through the Senate a couple of weeks ago. It didn't make it, it'll probably be up for debate and voting in September, you know, when, when they, the Senate next sits in September. We are trying to get it adjusted. That's for chapter 4 and chapter 5. We were successful in getting the Senate inquiry. At the Senate inquiry, the conclusion was chapter five needs some work. Unfortunately, they didn't, you know, unfortunately, you know, they didn't pay attention to chapter four, which means any company that's listed on the stock market that does a buyback, whether it's on market or off market, will lose franking credits. Any company that's not listed on the stock market that does a buyback, obviously, if you're not listed, it'll just be an off-market buyback. If you're not listed, you will not lose franking credits. What we need, if, if anyone is in David Pocock's electorate or Jacqui Lambie's electorate, any of the, any of the Senate, those senators, that we're talking to their advisors. You know, we'll try to speak to them again when it gets up into the Senate, because what we're trying to do is get the legislation changed so there are no significant unintended consequences. That's pretty much where it is. Whether we'll succeed or not, like, we'll try as hard as we can. You know, this is, this is a lot more nuanced than, you know, back in 2019. What we're really concerned about is, it's the thin edge of the wedge. Now, if, you know, if effectively the government gets away with changing this legislation, which will negatively impact companies with franking, and I, I'm not sure if anyone here is a shareholder in, was it the old, EAI? Yeah, that was a listed investment company that decided to give its money, you know, turn itself into a trust, and wanted to pay out a fully franked dividend. The tax office said they can't, and because that will get caught up in chapter four of the legislation. Now, which really is just incredibly unfair. It'll make the, the stock market, you know, everyone here who's on the call likes investing in the stock market. It makes the stock market less attractive for companies to list on. You'll get less and less opportunities to invest. Yeah, to me, it's very frustrating and very annoying. We'll keep committing significant resource to do that. A lot of people think, you know. You've got to remember the, the, in terms of, you know, the impact, you know, that it has on any of the pools of capital that are managed, you know, you know, any advocacy work we do has no impact, on the, you know, the various, you know, on WAM Capital or WAM Leaders, you know, any of those companies. You know, because the, the people that are managing the money, Oscar and his team, continue to do that. Thanks, Geoff. We did have a follow-up question, which you've just touched on there. So maybe you just want to reiterate: Is there a specific impact. This is from Vladimir. Will there be a specific impact on WAM Capital, for the future ongoing growth story, profitability, and ability to pay dividends with this franking legislation? No. No. Okay. What it does. Well, effectively, it's pretty much like a. It's like we are all, ourselves and everyone who's on this call, and every investor in the Australian market, you know, assuming this legislation goes through as is, isn't changed, then it'll just slowly reduce the pool of franking credits that you could get access to. There won't be any significant hip pocket nerve. You know, you're just the frog sitting in the water that's getting hotter and hotter and hotter, and then eventually, eventually, the big thing that concerns me, eventually, the government will say, "Look, the franking system doesn't work like, you know, Paul Keating, you know, wanted it when it was put in. Let's get rid of it." That's what happened. There was a similar system in the U.K. It lasted 26 years. Thanks, Geoff. Oscar, we'll go back to you. This question is from David. What are your views on the direction of interest rates in, and economic growth in the U.S. and Australia? Also, if you could comment on your views for the direction of growth in China. Those are two big questions. Very big question. Very big question for a small cap investor like myself. I, I'll look, we do a lot of traveling and to get an idea of what's going on outside of Australia, because a lot of the time, what's going on in Europe and United States is a lead indicator for what happens in Australia. I went to the U.K., and Geoff was actually there at the same time back in June. My colleague, Shaun, who's on our calls within the WAM Capital team, he was in the United States for two weeks, as was John Ayoub from the WAM Leaders team as well. I think when we all came back, our feeling was, y ou know, that was a tough time in the market and the huge fears of recession in Australia. I think when, when we went over to Europe and U.S., we came back thinking, "You know, it's, it's probably not too bad." Particularly in the United States, you know, new house home construction and new house sales and so forth, was extremely strong at that period of time, which has been reflected into, in some results in, in James Hardie's result, which was a couple of weeks ago. Look, in summary, we think, look, econ. Will we go into recession? Look, I think the U.S. is probably in a better place than Australia right now. Time will tell. It's, it's, it's hard to know. It's very choppy. You know, if you asked me a week ago, I might, might have said no, but then, you know, again, retail sales came in slightly higher than expectations last night. Again, raises questions around whether rates are gonna be increased or not. I think for both U.S. and Australia, we think rates will stay flat. We think, the, the hiking cycle's done enough, but it'll be an, it'll be a wait and see. As we've seen over the last few years, it's, it's a month-by-month proposition. On the economic growth side, yeah, I think, I think economic growth will be stronger than what people think, because it just feels like consumers just have more in their back pocket and, and, and are sort of, are more willing to spend. We've seen that particularly with travel, how strong the travel market has been as well. Yeah, look, in summary, we think it's probably. On the economic and growth side of things, it's probably better than what people have originally thought. We think interest rates are hot for now, but it's a watch and wait. On China, who knows? Look, China, I mean, look, the, all, all the, the, the data and, I guess the feedback is, you know, we've had Country Garden, one of the largest property developers in distress in the last few weeks. Look, it's all driven by what the government decides to do around stimulus. You know, we don't really we don't focus at all on the iron ore majors, you know, within our what we invest in with WAM Capital. In fact, our portfolio, really outside of a few consumer stocks, doesn't really have that much of an exposure in China. Don't get me wrong, it impacts the Australian dollar, which impacts other companies we invest in. Yeah, I think, look, the rhetoric is very negative. When on the other hand, when it gets really negative, then people start talking about stimulus. That's what we think is happening now. You know, I wouldn't be surprised if the government launches a stimulus of some kind, and that will obviously be very good for the iron ore majors, which, as I said before we don't necessarily own. Thanks, Oscar. Geoff, we'll go back to you. This question is from Bruce: Is there any intention of having a share purchase plan in the future? Look, the, obviously, that's a board decision. There's no intention at the moment. I think from the board's perspective, they'd want the profit reserve to be a, to be a bit bigger, you know, before that was thought of. Yeah, so to me, it would be, you know, not until pretty comfortable that we could see at least a year, 1.5 years of profit reserve and dividend. Even if that was. Even if it made sense to do a share purchase plan. I don't know if it's on here, but, you know, I'm I've had them before. What we've done historically, we haven't done share purchase plans. We've used the share price premium and taken over other companies. When we do that, then it's, we actually, it, it actually boosts the NTA because you're raising money at a premium to NTA, and you also get a secondary benefit of picking up additional franking credits. Thanks, Geoff. We've got a follow-up question to that, from Caesar. Do you think the share price dropped after WAM Capital absorbed Westo z and Ozgrowth? Well, I think the share price. Well, the share price dropped effectively after we'd made various takeovers, and we've issued shares in those new companies, whether it's Amaysim, you know, Westo z, yeah, any of the companies that we've taken over, there has been some softness in the share price. The unfortunate thing is, Westo z and Ozgrowth, it just coincided with COVID and the pandemic and really, that really tough year, you know, where the market fell significantly. To me, you know, there's usually some short-term weakness in share price, which then usually bounces back. You know, with Westo z, Ozgrowth, even though it increased the NTA, and it increased. Sorry. It was positive. You know, we picked up, you know, franking credits as a secondary benefit. I think the, the share price kept coming under pressure because of, you know, what was happening, in the mid and small sector, and you know, the overall stock market. Yeah. Thanks, Olivia. Thanks, Geoff. Oscar, back to you. This question is from Howard: Is there further upside in Kelsian, Kelsian Group? Yeah, well, we think it is. We own it. It's in the research part of the portfolio. Business has changed a lot over the last five years. It used to be effectively a ferry and tourism operator. It bought at. Well, effectively had a reverse takeover of, with the Australian bus and international bus business. Now, about 75% of their earnings is now in, sort of, in buses, which is more dependable, less cyclical, defensive style business, almost like an infrastructure asset. The business recently purchased a another bus business in the United States, which has got a good, strong exposure to oil and gas markets. We think that business is doing particularly well. We actually think the business reports next week, potentially could see some earnings upgrades around that, around that acquisition. Very good management team, defensive business. Yeah, we quite like it. It's in research. Yeah, it's a good business. Thanks, Oscar. This next one could be for you or Geoff. John has asked, TGP, I believe that's 360 Capital Group. He says they're currently trading well below their NTA, and it has cash on its balance sheet. Is this a company that WAM or WAR might look at as a takeover target? We have owned TGP in the past, a long time ago. I think it was 2016, 2017. It was, yeah, it was a difficult stop for us because, yeah, it was, as Geoff often says, sometimes you can buy a company at a discount to NTA, but the discount actually widens, and that's exactly what happened. Potentially, I'll answer for Geoff, he might jump in, but it could be an, it could be an opportunity for WAR, but you need to see the management team actually want to do something about that, discount to NTA. Back then, which is about five years ago, we didn't see evidence of that, so we sold that position. Yeah, no. You know, we've, we've really got to try to identify a catalyst that's going to change that valuation. That's, you know, that's the important thing from our perspective. Thanks, Geoff and Oscar. Geoff, we'll stick with you. The next one, this is from Andrew. Given the state of funds management outflows across the sector, how are you finding cash flows and withdrawals from the funds? Do you think that higher interest rates are going to have an ongoing impact to funds managers moving forward? Well, the, the last part first, there's no doubt, like, if, if you can get on term deposits 5, 5% or, you know, something around there, which, which we're getting at the moment, you know, for the cash that we have that isn't invested in the market, then you're getting that without taking any risk. You know, in terms of the economy, you know, it looks like in the last couple of months, the domestic economy in Australia has really slowed down. You know, that we're seeing some really, from retail, some really, good evidence to, you know, confirm all that. You know, it looks like, you know, there is a reasonable probability we'll have a recession. You know, whether that's. You know, whether we do have a recession or not, or it's a significant slowdown in the next, you know, six to nine months. I mean, one of the things about the stock market, the stock market does move in advance of that, and I think Oscar was talking about, you know, that, that in terms of looking through that cycle. The other side of that will be like June next year, we're gonna get the tax cuts. That will be, that will be, you know, quite positive. In terms of, you know, just getting back to our position in. You know, we manage listed investment companies. You know, one of the reasons. I know the question before, you know, there was an earlier question about ETFs versus listed investment companies, and also there's a question about managed funds versus listed investment companies. One of the reasons why I was very, you know, 24, 25 odd years ago, you know, effectively, there was a choice. I could have set up an open-ended fund business, or I could have set up a listed investment company business. We started with an open-ended fund, which is our first fund, and we've still got it, and then we developed listed investment companies. You know, we actually think there is probably an opportunity for other open-ended funds. One of the interesting things is a listed investment company tends to have a competitive advantage over some of those open-ended funds. If you're investing in small and mid-sized companies, you're never gonna have redemptions or, you know, money flowing in or money flowing out. You were saying there's quite a bit of money flowing out of fund managers at the moment, was it an observation you were making? Into the cash, and that maybe, maybe that is one of the reasons why our premium to NTA has declined from that 22% to where it is now. I think one of the reasons why our premium to NTA has declined is because we're paying out such a high fully franked dividend. People don't realize, you know, how valuable that fully franked dividend is and how we pay it. The more people we can educate, and that's why we're having this call, as well as we'll have another call, you know, with Oscar and his investment team, you know, later on this year. You know, just talking more about stocks. Yeah, so we don't get negatively impacted by inflows and outflows for, for, for the money we manage, but that does provide opportunities. Now, there was a period, a few, a number of months ago, where a lot of the big managers, there was a lot of money coming out of small caps, and that's when the small cap sector was getting, you know, sold down significantly, and that can provide some great opportunities. That's sort of my answer to that, Olivia. Thanks, Geoff. Oscar, the next question is for you. It's from Howard. Would you consider increasing the portfolio weighting to the ASX top 100? Thanks, Howard. No, is the answer. I mean, we wanna stick to our knitting and stick to the process that we've done for over 25 years. Interestingly enough, if you actually looked at the portfolio today, and Geoff put up the slide where it showed that, you know, the vast majority of the companies we own is outside of the top 100 companies, right? Now, if we went back, if we went back in time to 2015 and 2016, we would have had a greater exposure to the micro-cap part of the market. We actually made a conscious decision, which was in the back end of 2018, which was effectively the first bear market we saw, and it coincided with Tobias and I starting up and running the portfolio together, which has been fortuitous, given that we've, we've seen three bear markets in five years. You know, that was a tough period for us, and we made a conscious decision at that point to increase the liquidity of the portfolio. If you have a look at the average market capitalization within WAM Capital, it's actually a lot higher now than it was, five or six years ago. We actually envisage that going down in the next 12-24 months because we are optimistic small cap companies. Look, the answer is we don't want to get away from our knitting. We're good at finding undervalued companies with a catalyst that are under-researched, that which no one's looking at. We think we can get in there before our competitors, and that's where we get most of the gains. As I said earlier, there's gonna be some years, the 2022 financial year was probably the hardest year we've ever experienced. You know, that March quarter of the Russia-Ukraine War, I remember coming on doing a call straight afterwards, and it was crazy. Like, we had, we had a really good reporting season that February. All of our stocks were going down 10%, 15%. You sort of couldn't do anything. You know, it was incredibly frustrating. Now, that was a really hard period. You know, as I said, it's been a tough period for smalls over the last two years, but that could easily reverse. We think we're about to enter that period in the next few years. To answer your question, no, we're gonna stick to what we're good at and focus on small caps. Thanks very much, Oscar. The next question is again for you, Oscar. It's from Stefan: How much cash can you go to in cases of extreme market volatility? Thanks, Stefan. Well, we can go as high as we want. So in COVID, when COVID began, February 2020, you know, we're in the middle of the reporting season, that period of time where we're, you know, very much exposed to the market because we see a lot of catalysts, and we were at 15% cash. You know, we got on to, I call it, you know, there was probably could have acted a little bit earlier, but relatively, we acted probably appropriately. I remember that sort of the 20th of February or so, we made the decision to go to cash. We went to, over that two-week period, we ended up at the peak levels, we were at 43% cash. You know, we got back into the market very, very quickly after that point, where it became clear that, you know, all stimulus and so forth would, would, would improve a number of companies within a number of sectors. To answer your question, no, you know, we can vary the cash. You know, I've said on this, on this call before, you know, in that 2022 period, you know, we had a decision, do we stay in the market, or do we go in cash? We stayed in the market, and that was largely because the like, around I think it was about the time, about 50% or 60% of the companies we invested in had net cash balance sheets, so it's more cash than the debt on their balance sheet. We were of the view that the inflation that we were seeing was shorter term. You know, we had no idea that Russia-Ukraine War would linger on like it did. We took the view that we'll see through this over the next few months. Unfortunately, it didn't happen that way. In saying that, though, you know, as we talked about earlier in the call, we've had a great year in the 2023 financial year, and if we had too much cash to close out the 2022 financial year, we wouldn't have had the performance that we've had in 2023. Looking back on it, look, we're happy with the decisions we made, although, that you know, it doesn't look good on paper, that 2022 financial year. Yeah, as I said, we, depending on what we think is. If we think the market's really negative, we will go to cash 100%. Thanks, Oscar. Geoff- Oscar, did you say you'll go to 100% cash? I know about that. You said you go to cash 100%! Well, 100%, as in we will go to cash. Different context, but yes, don't interpret it as a 100% cash. Okay. Cause I'm just trying to think in 25 years. Oh, you never go to 100%. No, you never get to 100. What would you, you would have been 60, 70 over at one point? Yeah, I'm just trying to think. Yeah, I'm trying to think if. Yeah, probably 60. The problem is, you're only there for a little while because that's, that's close to capitulation. When you know you're high on your cash, you know it's close to capitulation, so you want to start moving back pretty quickly, don't you? That's right. That's what happened in COVID, because I always remember it where, you know, it was a really hard time. We're all at home, and everything was really negative. I remember Cochlear was the first company that raised money, and it was AUD 1 billion. We didn't own shares in Cochlear, and it was sort of that was, like, literally the turning point. We tried, we bid into the capital raise, and we got zero. I was like: "Oh, okay, that means everyone's cashed out. They're ready to go now." That was. I think we weren't at 43% cash for long. Thanks for that, guys. Geoff Wilson, this next one is for you from David. David's asked, "From a dividend security aspect, why shouldn't I be selling WAM Capital and reinvesting in WAM Research, given that they operate similarly, but WAM Research has a big profits reserve and a good franked dividend yield? Well, then, then you got to look at the premiums to the two. We. WAX currently, I think, is about, yeah, as 22%-23% premium NTA. You're taking that risk. You're buying the assets above what they're worth. And, except you've got more, you know, more profit reserve. Ideally, what you want to do is buy a listed investment company that's trading below NTA, has profit reserves and franking, and you're confident that the, you know, the people managing it will be able to get it to trade at NTA, if not a premium. Thanks, Olivia. Thanks, Geoff. Oscar, we'll go back to you. Joel has asked: What about Strandline Resources? Do you see any growth for that company? We participated in the recent capital raising, just in, within WAM Microcap. We think it's been through the, the difficult point of commissioning, with their mine, and they've had a few ramp, ramp-up issues there at Coburn. We actually think the stock's looking really cheap. It's a small position in WAM Microcap. You know, Cooper and Will, who, who are our analysts there, really, really like the stock, so we've got a small weighting. It's about 0.25%. We're gonna meet management over the next reporting season and, and work out what, what we do with it after that point. Thanks, Oscar. We've got quite a few stocks coming through. Adrian has asked: "There are some new additions to the WAM portfolio. Would you run through what DUG Technology does? Yeah, I mean, always through reporting season, you're always looking for new ideas in the portfolio. One, one of them, which we really like and see a lot of upside, is, is a company called Light & Wonder. It's actually the number two competitor to an ASX-listed company, well-known, large cap company called Aristocrat in Australia, and it's actually the ex- or Aristocrat management. Actually upgraded earnings over reporting season, seeing its balance sheet de-lever as well, is trading on a valuation that's 30% cheaper than Aristocrat. We really like that. That's one of the larger positions in the portfolio now. As I touched on before, we've got a number of retail, yeah, retailers in the portfolio that we've added, that we bought, through that June period when it was really weak. Harvey Norman, Nick Scali is, is one that's done really well for us, as well. Yeah, always looking for ideas, but I'd say for the most part, the portfolio is pretty similar to what it was when you saw it at the annual report in June. DUG Technology, actually very excited about this company. It's, it's done very well for us in the micro-cap portfolio. It's got a strong exposure to oil and gas markets. Effectively, what it does is it's, it's called a, a supercomputer that sort of, looks at seismic activity in, in offshore, oil and gas, deposits. Obviously, it's a very strong oil and gas market at the moment. The stock was very, very cheap when we bought it. I think it was on 10 x earnings, and it's won a lot of work, and I think the share price has doubled over this point in time. We're quite excited to see this company report its results in August. We're sitting sort of just over 4% of the company at the moment, but, yeah, potentially could go quite a lot higher. Yeah, we really like this one, and it's definitely one to watch in August. Thanks, Oscar. Another stock for you. This question is from Bill: What are your thoughts on Beston Global Food Group, which was a past holding in WAM? Oh, Beston. Yeah, no, we're out of that one, thankfully. Probably not our finest achievement over the last few years. Look, there was a turnaround story there, but it's a very difficult business, and dairy just generally has just been hammered with costs, high costs and actually falling milk prices globally. No, we're not there. The structure of the corporate structure of the business just wasn't right. Yeah, no, we're not there, not there in Beston Foods. You'd have to see a monumental change for us to go back there. Thanks, Oscar. Geoff, we'll go back to you. Howard has asked, "Do you have any plans to expand your WAM Capital board or investment team? Well, the board, no, we're pretty happy with the board and the quality of the board. Yeah, we've got some really good quality board members, you know, from our chief technology officer at very senior levels to, you know, lawyers that, you know, do a lot of work with in the, you know, crypto, blockchain space. So, plus, you know, the, the people with various other financial services e-expertise. So pretty happy with the board. In terms of the investment team, already, I think, Oscar, you know, I'll let you speak for that, but I would say you, you, you've got already a pretty big investment team compared to your competitors and w hat are your plans, Oscar? No, I think, I mean, we've got, there's six of us, myself, Tobias, as the portfolio managers, Shaun Weick and Sam Koch, senior equity analysts, and Cooper Rogers and Will Thompson as our dealers and equity analysts. That is a big team, the six of us, in charge of just over AUD 2 billion in, in small caps and micro caps, and that's perfect, perfect number of people. Thanks, Oscar and Geoff. Oscar, the next one is for you from Andrew. He's interested to know your views on companies like Lovisa or Globe, which seem to be market darlings. Yeah, Lovisa's gonna have a fascinating result this August. You know, definitely a market darling. It's done incredibly well, rolling out on a whole heap of stores, globally. It's one of the best global growth stories, probably within the ASX. Yeah, it's it's gonna have a challenging period in the next 6 months, there's no doubt about it. The demographic is, you know, younger people, call it, in their 20s, you know, which is, is really struggling at the moment, they're coming up against some, you know, really strong comparable periods. Look, we still own the company. You know, it's been sold off heavily. It was around AUD 27. It fell to about AUD 18. We bought some. We actually, lucky, it was one of our best stocks last year, even though it was a small position. We were lucky enough, we sold a lot at AUD 27, and we bought back at AUD 18. We do have a holding. It's not as big as what it was, yeah, we still think, you know, very good management team led by Brett Blundy, one of the best retailers in Australia. Yeah, we really like that one over the longer term. Globe, really, really good business. It doesn't trade. We've tried to buy it many times in the microcap fund. Really, really well run. It's, it's a funny stock because it's, it's sort of like, I, I don't think, know if anyone owns it really, out in, out of our peers in, in, in the funds management world, because it's very tightly held, and so the stock doesn't really trade many shares on a, on a year-to-year basis. We always look at their results, and they always perform very well. It's just so small for us, it's really hard. We can't really even get any stock, even in the WAM Microcap fund. Olivia, I know we've been going for an hour and 25 minutes. Look, it could be you and me, Oscar. It could be. It could be. I think. Technology, technology might be failing us. Do we have any other questions? Sorry, guys. Sorry, guys. Sorry, guys, I'm back. I was stuck on mute. Sorry about that. Yeah. We have another question from Niels. Oscar, this is for you. He said, "WAM has recently bought into Rumble Resources. Do you want to explain your rationale behind that? That's not us. No, we haven't. That might be Wilsons Advisory, the stockbrokers. I think they raised money recently. No, we haven't. We definitely haven't bought into that company. Okay. Thanks, thanks for that clarity there. Dallas has asked Oscar if you have any views on RFF. Generally, REITs, this is Real Estate Investment Trust, really isn't our domain, so I don't really have a view. All I can say is, just in the REIT sector generally, it is looking very, very cheap. There's a lot of companies trading at discounts to net, Net Tangible Assets. Again, you've got to find a catalyst to invest in these companies, and generally, the way we invest within WAM Capital, we're looking at industrial companies. When we look at sort of, in the sort of, call it, the property sector, we tend to like fund managers, because there's more sort of dependable earnings and more catalysts because you can see earnings upgrades. The company that really, the only real, call it, REIT or property company we own is, is, is HomeCo, which ticker is HMC. It's a large holding in, in, in WAM Capital and WAM Research. Yeah, sorry, you probably don't I haven't seen RFF for a number of years, so I don't really have a view. I'm sorry. Thanks, Oscar. Geoff, we've got one from Peter. He says, "How much duplication is there between shares held in WAM Capital versus WAM Research, and what is the difference in those portfolio strategies? Yeah. Effectively, WAM Capital was. Well, we started with an unlisted trust, and then we decided. That was just for high net worths, and then we decided to let, you know, retail investors get, you know, get exposure to the same strategy, and that was WAM Capital. That's buying undervalued growth companies with a catalyst, and when we couldn't find those, then we'd sit in cash. When we sat in cash, with that cash, we'd look at more short-term trading opportunities. WAM Capital is broadly half undervalued growth companies. That's. We call that research with a catalyst, and the other half is short-term trading. We call that market-driven opportunities. Later on, we created another company which ended up becoming WAX, you know, WAM Research, which is purely those undervalued growth companies that we're buying with a catalyst. WAM Active, you know, we end up floating, and that's purely, you know, the trading part of the portfolio. Yeah. If you buy one share in WAX or you buy. Yeah, actually, if you buy a share in WAX, then you get effectively half a share in WAM Capital, because you get exposure to that research part of the portfolio. Just to complicate things more, with WAM Active, you know, the part of that portfolio, 10% of that portfolio was buying LICs or, or discounted asset plays, which we decided to put, you know, on its own, and that's when we created WAM Strategic Value. Thank you. Thanks, Geoff. Thanks, Geoff. That was great. And Phil has a question which follows on nicely from that. He's asked, "Can you run through what the WAM Capital pipeline looks like?" He, he's talking about this longer term. He says, "Can I stay invested for 10-20 years? I want to leave my current investment on set and forget. I don't care about the share price, only just that WAM will be around in 20 years' time. Can you touch on succession planning? Yeah, I'm pretty confident I'll make 20, so I'm 65. Gotcha. My dad made it to 85, so I thought probably, you know, I'm, I'm fitter than my dad, so I thought, probably thought mid-90s does me. The, the plan would be for, you know, for all the listed investment companies to still be around in 20 years' time. In terms of. If you're looking for a, an undervalued, you know, sort of a fund manager that's focused on that mid and small, you know, growth sector, you know, that does obviously have a higher risk than the larger end of the market, and obviously higher risk than having it in, you know, term deposits, you know, then, yeah, we're pretty comfortable. If you do the share purchase plan, then you'll, you'll have a lot of dividends. or sorry, you'll have a lot of shares by the in 20 years' time. Thanks, Geoff. We'll flip back to Oscar for this next one. Oscar, Guy has asked, "What lithium and graphite stocks do you own?" Maybe if you can't tell us the specific companies, do you have a view on lithium? Thanks, Guy. Yeah, look, obviously lithium is just, you know, will be an enormous, you know, beneficiary of electric vehicles, and it is an exciting space. I think what we've learned over the last few years is that there's a lot of pretenders in this space, and actually digging it out of the ground and having it, and producing is actually very, very difficult. We've seen companies such as Core Lithium, which the ticker is CXO, has really struggled with that and is actually raising money today. Now, we have a Mining really isn't our sweet spot, let's call it, within WAM Capital. We've only got a few holdings. It'd only be about 3% or 4% of the portfolio, but the company that we do like in that space is Pilbara Minerals. It's one of the largest producers in Australia. It's extremely cheap. It's a very high dividend yield, generates huge amount, huge amounts of free cash flow. With the catalyst, while we hold a little bit in that company, is we actually think it potentially is looking for an acquisition. It's a small weighting within WAM Capital. That's probably, we think is, that's probably the best play in lithium. If you're looking in there, Min Resources, Mineral Resources is always a good company to have a look at, but they are expanding into iron ore, and it feels like that's probably potentially at the wrong time of the cycle. Although it's got one of the, you know, one of the best founders you could argue in, in, in the market. You know, if you're willing to look longer term and back him, then, you know, you tend to, tend to, tend to do well. Look, long answer again, but, I'd say Pilbara Minerals, which is PLS, is your best bet in lithium. Thanks, Oscar. Warren has asked: What do you think of GRR? The ASX ticker, GRR. I think that's Grange. Which one, sorry? Grange Resources. Grange Resources. Got no view, sorry. Okay. Apologies. Oscar, the next one, what's the team's thesis regarding Comet Ridge? We own Comet Ridge in the micro-cap portfolio. We actually were fortuitous, and we inherited the stock within the Westo z takeover. We did a lot of work on the company, and we really like it. It's got very strategic assets in Southeast Queensland, which is very close to Santos, and they're developing a field there. They've signed an offtake agreement with Orica, which we think is gonna formalize in the next few months, which is the key catalyst to own the stock. As I'm sure a number of listeners are aware, there's a shortage of gas on the east coast of Australia, so we actually think it's one of the few producers that are listed on the ASX. We do think it could be a takeover target at some point. Thanks, Oscar. Sticking with you, what are your views on Premier Investments? Are your thoughts on PMV similar to Harvey Norman? That's from Alex. Yeah, I mean, Premier is a company we've owned for a long time, obviously led by, who we consider one of the best or the best retailer in the country, which is Solomon Lew. The commonality with Harvey Norman is, is Premier has, you know, large, large amounts of cash, no debt. It's got property, it's got shareholdings in Myer and Breville, and if you strip that out from the market capitalization, you're actually paying very little for, you know, the global businesses in, in Smiggle or Peter Alexander. Yes, Premier, Premier, we bought more through that May and June period. We felt it got oversold, went to, you know, from around AUD 27 to AUD 18 in the space of a couple of months. And similar to our views on Harvey Norman, yeah, we think numbers have been cut too aggressively, and we think we'll actually get upgraded over the next couple of years. And I think broadly on retail, so there's the two themes that we've really that are in the portfolio on retail. You've got those companies with property backing, like a Premier, Nick Scali, or a Harvey Norman. And you've also got those companies that are exposed to housing and companies such as obviously, Nick Scali and Harvey Norman. Also, on the micro cap side, we own Adairs and Beacon Lighting. And we think it's actually gonna be a very positive period for housing over the next few years, like we see in the United States, and even in the United Kingdom. That's just simply driven by record levels of immigration, and the fact that we had low levels of housing, housing turnover, over given the market uncertainty over the last two years. We're seeing great forward lead, lead indicators. REA is close to real estate, realestate.com.au, large-cap company, great company. You know, it's almost back at all-time highs. You know, generally, that's a good lead indicator for sectors in, in retail and also building materials. Yeah, quite positive on housing, definitely just generally in the portfolio over the next couple of years. I mean, to me, the, the, the, the fascinating thing is, you know, Oscar, with Myer, how, you know, we started buying a number of years ago before COVID, around AUD 0.40. You know, it's been, you know, it's been a tough time, but, you know, we've made good money out of it. Then one of the you know, the other side benefits is, you know, we got to interact with Solly Lew very closely. You know, and, and the, you know, we've probably made a lot more money out of Premier. Yeah, that's true. Than we made out of Myer. It's quite bizarre, isn't it? It's been funny because we've owned both at the same time, really, so, which is a bit odd. I mean, I can't believe I haven't had a question on Myer. Yeah. Yeah, they're doing actually, you know, had an update recently, actually doing quite well, paying a really good dividend. Unfortunately, John's going. He's done a tremendous job. You know, the business is actually in pretty good state, so we're fascinated to see how that plays out actually in the next 12 months. Thanks, Geoff and Oscar. Oscar, you kind of touched on this, the themes that you're following, in the market. Ian has a question that flows nicely from that. He says: "What are the trends that WAM Capital is following in the market? Or is it more on a value-based individual approach to each company, or both?" Maybe can you talk about your process of how you look at companies? I wonder if this is Ian, my father-in-law, who's actually a shareholder, but if it is, it's a, it's a good question. Irrespective of that. Anyway, look, we invest on a stock-by-stock basis. You know, and clearly, we wanna see a catalyst, and it's kind of for our investment process. However, we'll say that trends are always very nice to have in the, in your back pocket, and certainly in the, the second half of the 2023 financial year, we benefited from a couple. It was just really through luck, really. We owned two tech companies in the ASX called NextDC, which is a data center operator, and Megaport, which provides services to data centers. When NVIDIA in the United States had that huge result based on artificial intelligence, these companies ran very strongly through that period. That was a trend when we saw with artificial intelligence. Other trends we've seen, electric vehicles, we've played that nicely, and again, fortuitously, I would say, through Smartg roup and McMillan Shakespeare and SG Fleet. This is because a lot of these fleet leasing and novated leasing companies will get paid a lot more if they sell an electric vehicle than your traditional combustible engine vehicle. Yeah, trends always roll every, like, sort of 2-3 months. They're always nice to have. You know, certainly the trend we think is happening right now in the market is those stocks exposed to consumer probably aren't as bad as what people think, so they're having a nice little rally. It's always important to know when these sort of trends start to dissipate, because that's when you should be selling the stock and taking some profit. That's something we monitor all the time. Yeah, hopefully that answers, answers the question. I'd say always the starting point is the process. Does it have a catalyst? Does it fit the process? Let's buy the company from that point. Thanks, Oscar. Ian has written in a second part of his question, which I think is more for Geoff, but Oscar, maybe you jump in here, too. He says, "How much of the WAM dividend is based on dividends from the companies in the portfolio, and how much is determined by investment returns, and does that change over time? Well, I mean, I can start. The All Ords, the yield on the All Ords is 3.7%, and it's 57.9% franked. Oscar, what would your guess be on the WAM portfolio, the yield on the WAM portfolio? It's going to be lower than the, the All Ord or the All Ords, 'cause it's focused in small cap companies, 'cause we've got a number of companies, like those tech companies, for instance, I'd mentioned before, don't pay dividends. Maybe, 2.5%? If we're lucky. 2.5%. Yeah, okay. Say 2.5%, and we, and we're giving you. Yeah, so therefore, you know, if you're getting a 10% fully franked yield on assets, so the other 7.5%. Now, does that change over time? Well, it, it obviously does. Like, if you know, if the market dropped 50%, then obviously the yield doubles. Now, if the market goes up, you know, 30%, then, then the yield drops by that amount. I remember looking at the yield. You know, I'm surprised how low the franking level is at, at the market. I remember, you know, back, it could have been 10 years ago, it was about, it was about a 4% yield on the market. It probably runs from that 3%-4%, and probably in Small Ords, it's probably that, you know, the 2%-2.5% or 2%-3%, about that range. Back, you know, 10 years ago, it was 4% yield, and it was 77% franked. You know, the franking's dropped to, you know, that 57.9%. The tough thing is, and I hate to keep harping on it, you know, the government is trying to stop companies that have excess franking, paying it out by raising capital. That's one of the things we're against. That franking number will continue to decline, I would assume, over time. The percentage franking. For, for WAM Capital, all that means is we've got to make more money and pay tax, because if you make the money and you pay the tax, then you have the franking. Yeah, so about 25% of our dividend, it looks like it comes through, flow through 20%-25%. Thanks, Geoff. Oscar, we've got 2 questions on Flight Centre. Marian has asked just for your views in general on Flight Centre, Guy has asked, "How many shares does WAM Capital own in Flight Centre? Thanks, guys. I mean, look, the Flight Centre is a very large position. How do I say. I can't really give you the exact number of shares that we own, but call it a top, top 10 position in WAM Capital, so, you know, quite large. What are our views on the company? We bought it very well, started buying it, around AUD 16, in November, December last year, and currently trading around AUD 22. Yeah, look, the business has done very well. It's, it's, it's upgraded earnings twice, since that point. It's made a little acquisition. I think one of the things people have forgotten about with Flight Centre is that it, it generates a lot of cash. You know, and it's building up a huge amount of cash at the moment. Obviously, with interest rates a lot higher, you're gonna see a lot more interest revenue come through for the business. The real catalyst for us in buying the business is they've set a target in the 2025 financial year that they will have a profit margin of 2%, based on all the tickets. That's the profit that they generate in the business versus the total amount of tickets that they sell. The analysts following the stock have a profit margin of 1.5%. Our view is, is that it doesn't even need to get to 2%. It could get to 1.75% or 1.8%, and you're gonna see significant earnings upgrades. That's the reason why we still own the company. We're backing management to get close to that 2% target. If we do, we'll see quite strong earnings upgrades. We've got the results next week, so, and they upgraded a few weeks ago, so, you know, it should be, you know, a very, very strong result. Certainly, our feedback on the travel market is still very strong at the moment. Thanks, Oscar. Geoff, this next one is for you from Alan. He says he's been a shareholder in various WAM likes since 2012, and his observation is that issuing options and share purchase plans doesn't seem to have added value for shareholders, but has led to sustained periods of share price weakness, compounded by takeovers with too much shares on issue growth. Can you provide a comment on that? Yeah, just the latter part is the, like the takeovers, obviously, if you're issuing shares for the takeovers, then there's more takeovers that turn up. The actual numbers are, they do increase the NTA. Well, sorry, the ones we do. We only do them if, if, if we're gonna make a good return on it. So yeah, even though there might be some short-term selling, then, then it does. In terms of the option or the share purchase plan, yeah, that, that just increases the size of the company. So there has to be a benefit to do that. The interesting thing is, with options, usually what happens is when you announce the options, you actually usually get the share price, depending on where they're priced. The share price probably usually outperforms until the options, until it goes ex options, then it really. It's a little bit of Russian roulette, whether those options get exercised or not. I mean, the reason why historically we've liked options, because if we did a rights issue, then you have no choice. It's like holding a gun to the shareholder's head and saying, "In the next 6 weeks, you've either got to put money in or you get diluted." Options, you know, if they last for 1.5 years, then the company has to perform. The way we structure them, I know Platinum did some options recently, which were in the money, but, you know, below NTA, we don't do that. We try to do it at NTA, if not a premium. You know, then we have to perform to raise that money. I mean, there's no doubt. With the share purchase plan, you know, you're, you're issuing more shares. If you're in, that's, that's, you know, if you're increasing supply, then, you know, then, as you said, there's usually a period of, you know, where the share price does nothing. Then, then effectively, it's the board trying to weigh up. Then, like, classic example is, well, say WAM Capital. You know, if we, you know, if we were still the size we were when we floated, you know, which was we raised. You know, we had a prospectus to raise AUD 20 million, and we're oversubscribed, and we end up doing a placement of that. Ended up with AUD 21.5 million. You know, then, you know, we would have never made a takeover bid for Amaysin. You know, so to me, when you, when you increase in size, opportunities present themselves. Another example is like WAM Leaders. When we floated WAM Leaders, that was AUD 400 million, about AUD 400 million, and now that's, you know, just a little under AUD 2 billion of assets. Now, all of a sudden, in that space, you know, they, they get exposure to those big companies. You know, we're at a size where, you know, we get incredibly incredible exposure to companies. You know, You know, we would probably, I think Oscar and his team probably get the best exposure to medium and small size Australian-listed companies or potentially listed companies in Australia. With Leaders, we're trying to increase the size of Leaders to get that, you know, to have that type of, you know, exposure. I know, Matt, I think, had, you know, I think had, you know, the, the CEO of CommBank came into our office the other day. You know, we would've, we would've never we would've never get, got that quality of information back then. And in investing, you know, how I see it is, the best quality of information tends to win. If you can have. You know, if you can get access to the best quality of information, then you can make the better decisions, that ends up giving you better performance over time. Sometimes, you know, obviously, when you get larger, you know, that's what it actually, one of the things that does come to the table. You know, there might be some short-term, it might hold the share price back short term, but it actually might create some significant value medium long term. Thanks, Geoff. Following on from that, Neil has asked: "I understand with some of the takeovers of recent years, WAM has not only gained NTA growth in franking credits, but also realized capital losses embedded in the takeover target. Yeah. Yeah- Can WAM look to reduce tax, tax rate? Can we use the. Yeah, I know when we I know there's something. Yeah, when, when we make a takeover, the way that it's treated for tax, if we're, if we're issuing shares at a premium to NTA, we do get an embedded loss, which actually does reduce our tax payment. There is a benefit. In terms of the tax that's in. You know, if the company has tax losses, then we usually can't use them at the company we're taking over. Franking credits just get amalgamated, just put into the big pot. Tax losses, there has to be certain requirements you need to meet, continuity of ownership or continuity of business, and usually, that's very hard. Thanks, Geoff. Oscar, back to you with some stocks. What are your thoughts on TZL, Gentrack, and the Symbio Superloop merger? That's three different ones. Yeah, cool. No, thanks for the question. TZL's, look, very, very small company. I think it could be running out of cash based off its last quarterly, so that's- we don't own that one. Gentrack, been a very successful turnaround in the technology space. These guys are focused in the utility space but have a strong business in the United Kingdom. Very strong organic growth profile for the business, which doesn't include new contract wins. We see this business growing its top line around 15% a year. We hold this in, in the WAM Microcap portfolio. It's what was one of our best stocks last year, is still very bullish on the, on the company into this year. Symbio and Superloop. We own Symbio. We just started buying it, and then the takeover occurred. We just thought it. We had a look at it, looked interesting into reporting season, we owned it, the micro-cap portfolio. Look, the merger does make sense. There's definitely synergies between the two companies. We still own the company. We do think there might be some other interest in Symbio. It is a strategic asset. Particularly listed company, Aussie Broadband, potentially could be interested in it, too. We're, we're still holding our Symbio shares here. Thanks, Oscar. Geoff Wilson, the next one is for you from Robin: Is there any intention to move to a more regular dividend payment for WAM, i.e, a quarterly dividend? Yeah, I mean, that, that is interesting, Robin, and if you look in the UK, and Oscar said we were both over there just, you know, recently. They do a lot more quarterly dividends over there. In Australia, some companies do quarterly dividends. I mean, we haven't seen any, any, anything to show us or we haven't seen anything that more regular payment of dividend actually helps your premium or discount to NTA. Yeah, at the moment, the plan is just to make, you know, to pay it on a, on a six-monthly basis. Yeah, that's, that's the current plan. I mean, we do look at it, and we do consider it, but the board at the moment has decided to stay where we are. Thanks, Geoff. Oscar, the next one is for you. This is kind of putting you on the spot. It's a question from Munraj. At the current share price, what is the one stock that you hold that you're most excited about? G'day, Munraj. How you going? We should catch up. I'm assuming it's you. What's best? Oh, geez, what a question that is. Good question. Good Good question. Then ask for the second best. All I can hear in my head is Tobias yelling at me, saying, "TUA, TUA, TUA." I'm gonna say TUA, which is TPG Singapore. Oh. Which we've talked about many times here, so. Tobias' one. What's your one? Oh, it, it's probably got the most upside for us, but I'm a value guy. He's the growth guy. He's more exciting than me. What about value? What do you like in value? Okay, here's a good one. Look, I'm gonna stick with the retail names. I, I really am. I think Nick Scali, that was a really, really good result. I think the market's got it wrong on earnings this year and next. You know, it's funny, you know, it's always great to see conservative management teams. You know, they've got properties on their balance sheet that they purchased 10 years ago in Alexandria that is on the balance sheet lower than what it was than they bought them. Clearly, their property is materially understated. You got that, which is a nice backstop for the company. Yeah, in terms of, they've done this acquisition of their competitor, Plush, taken out a whole heap of synergies. I think what's, what's really come out this reporting season, which is interesting to the retail sector, is that, So globally, there's a lot of regions globally that are really suffering at the moment. A lot of the suppliers are suddenly seeing these big Australian retailers are actually doing quite well. They're getting better terms with their suppliers. Suddenly looking at shopping centers as well, where, landlords, you know, probably don't want that small, independent, retailer that has a bad balance sheet in there. They want the bigger retailers like, and the stronger retailers like Nick Scali, so you've got that sort of thematic going for it. But yeah, but just generally, as we look forward in the earnings, like we think they're probably 20% too low, and we think given the success of the Plush acquisition, he's gonna repeat it. Looking at that, the stock's had a good run, but I, I think it can get to, you know, AUD 20 in the next sort of 12-18 months. Yeah, very bullish on that. It's interesting, like, there's a lot of stocks like that 's why we're excited on smalls. Look, that'll be my pick. That's probably the best thing I've seen this reporting season. Tobias would say TPG Singapore, which is TUA, T-U-A. It is a great story. It's effectively when David Teoh sold TPG to Vodafone, he was basically the rump, which was the Singapore business, you know, really fell out of favor in the market. David actually bought more stock at the lows at AUD 0.50. We followed him in around that point in time in the microcap portfolio. Today it's about AUD 1.80, AUD 1.90. They've come from nowhere to suddenly having 6% or 7% market share in Singapore in mobile. They're about to launch broadband. It's a very similar story to TPG in the early day, you know, a decade ago. It's a great buy and hold company where you can see, you know, you make up your own valuation over the, over the longer term in terms of execution. There you go. There's a value play and there's a growth play. How's that? Thanks, Oscar. Look, we are getting quite a few stock picks, so Oscar, I might just give them all to you. Yeah, go for it. Your views on CSR? Great company. Yeah, it's probably a buy. Yep. It's cheap. Yeah, like, you know, it feels like the worst in building materials, like we're gonna have a good period of the next couple of years. Yeah, and, and so, like, we just do a buy, hold, sell, and, and we can't give advice. This isn't advice. We're just doing a little playing a little game. Yeah. I'd say this has a buy. Unfortunately, we don't own it in the portfolio. We own a number of others. Okay, Hellow orld? I think. Look, it's very similar to Flight Center, what I talked about before, really the same business. I prefer Flight Center, I, you know, I, I think you can hold it. Steadfast Insurance, SDF. We own it. I've got to say a buy. The result's probably gonna come out in 20 minutes. No, Rob Kelly, CEO, is fantastic. You know, I think they'll probably pull the trigger on an acquisition soon. You know, hopefully see an upgrade to earnings this year as well. No, we still like it. It's a great company to buy. GQG? GQG. We were, I'm gonna say, yeah, I don't like it. Look, we struggled at the IPO. It's got a fabulous, you know, fund manager, and he's done incredibly well. It just, to me, thinks it smells of a stock that's got huge key man risk, and we've all seen what's happened with Magellan. His performance has been very, very strong, which sort of makes me think it mean reverts at some point. I'm gonna say, yeah, I'm, I'm probably a sell. Okay. CYC, that's Cyclopharm. Cyclopharm. Look, we don't own it. It's got an FDA approval coming up in the end of September. We will look at it at the micro-cap portfolio, but with these things, they're so binary, they're very, very difficult. So often you're off-you're better just to watch it and see what happens, and you're, you're better off just buying on the day because they often, as we saw with Neuren, they keep going higher and higher. But we'll wait on the sidelines, but we'll certainly be watching it. Okay. What's the answer? I'd say that's hard. I hold. Great. DSE, that's Dropsuite. Yeah, we missed it, unfortunately. Looking at it again, because it had a slip-up at the result recently. There's a new product that's been launched by Microsoft. I'm a hold. We're looking at it. Okay. ACE, that's Acusensus? Yeah, I think this is this recent IPO that I think it was very early stage that had. It monitors people and their mobile phones in the car. We didn't go into the IPO. It's very early stage, very small, but we're gonna watch it closely at the August result. The answer probably, I'd say hold, give it a chance. Okay. JB Hi-Fi. I think it's a buy. That was a really good result. Best retailer in Well, one of the best retailers in Australia, dominates its category. Again, you know, there's a lot of short sellers betting against its performance. I think they'll be wrong. I think earnings are too low. Yeah, really like the company. We would have bought it. It didn't fall enough, unfortunately, whereas Harvey Norman did. Yeah, our preference would be Harvey's at this point in time. Definitely buy or hold, you're fine. Okay. Retail Food Group. It's a hold. I'd love to say it's a buy. We own it. Worst company we had in micro-cap portfolio last year, but it's trading at a double-digit free cash flow yield. It's. Look, I feel sorry for the team there because they've been through. It's not their issues, it's the past, and that's finally cleared now for the whole business. Then at the point in time, it cleared, you know, the market entered a recession, effectively. We haven't been able to see what this business can truly earn. It's generating really strong cash flow. Balance sheet's good. You know, there's got some bad brands within the portfolio. They've got some good brands. Yeah, we think it's a hold. The reason why I'm saying it's not a buy is because it's, you know, a really small company. It's gonna take some time for the market to get used to it before it starts rallying again. I think it probably does some time down at these levels, and then maybe in the second half of the financial year, probably looks interesting. I'll say hold. Thanks, Oscar. Cleanaway. Ooh, tough one. Yeah, it's a hold. Good company. Not convinced on management, though. We don't own it. Yeah, just struggling for a catalyst on this one. It's expensive. If it has a slip-up, it's a massive acquisition target. Very consolidated industry, not just in Australia, but globally, so it's a good company, and it's also got ESG credentials as well. It means the valuation probably stays quite high. I'd say hold. Thanks, Oscar. Costa Group. Currently in a takeover. It's funny, we tried to buy it for about two weeks and then couldn't. Lo and behold, there was a takeover. Look, yeah, so it's. Look, I want to look at it if the takeover doesn't eventuate. Pyne & Partners already own quite a significant amount of stock, so you would assume that it would happen. Similar to what I said before on Select Harvests, Costa's been really impacted by the weather over the last, you know, two or three years. Hasn't really had a good run at it. That was clearing up in the first half of this calendar year, thankfully, and actually, it had a really good first half results. We were that was the real reason why we're looking at it as an idea into this reporting season. I would say if the takeover doesn't go ahead, it's a buy. You know, if you, if you own the stock, yeah, I can't tell you what to do, but generally, when we're in that position, you know, obviously getting a takeover is good. It's sometimes better to take some profits, in my view. Thanks, Oscar. MAF, that's MA Financial Group. Yeah. That's been in the press lately, given Redc ape, which is one of the funds they manage, which is investor in basically pubs, has had some. They basically paused redemptions from that fund. They're now in the process because they've got to fund some redemptions to sell some pubs. That's why the share price has fallen quite a lot. Unfortunately, we own it, and we got hit on that in the micro-cap portfolio in July. Our view is, is that the share price has fallen more than what it than what that issue deserved, let's call it, and there hasn't been any impact into the funds management business within Moelis. We've actually been buying the shares into the result. We actually think it could have a quite a decent result. The shares are looking cheap right now. Yeah, we think it's buy. Thanks, Oscar. PAC, that's Pacific Current Group. Yeah. That's currently under takeover from Regal at the moment. We actually do own-- we own shares in RPL Regal. We actually think it, you know, would be a good, good acquisition for them. From a PAC perspective, I think I'll probably reiterate my previous comments on, on Costa. Look, it was a very full price. It was a big price, so and you never know what happens in those situations. But clearly, GQG is the other party as well, that's interested there, but I don't know if they're playing games or, or whatever. Look, hard to make a comment on PAC. Their, their result was okay. I wouldn't say it was that great, but it was a good price they received on the takeover. For me, if we owned it, I'd probably say sell. Thanks, Oscar. LKE, that's Lake Resources. Lake Resources, yeah, again, sort of in the resources space, it's in that sort of, you know, battery metal space. It's pre-production, it's been all over the shop, that share price, in the last few weeks. As I said before, I think you want to stay in the producers, which would be Pilbara Minerals. I, from my perspective, we wouldn't own it in WAM Capital, I'll say it's a sell. AVZ Minerals. Oh, the old AVZ! Oh, God, you have to make a call on the Congolese government, I think, if you're going to own that company. I'm serious. Hey, hey, this is, this is a little benefit everyone gets. Normally, normally this is the next, the next call, isn't it? it? I suppose we've done all the main things. Oh, sure. You, you keep going. Yeah, I've got no real view on that. I mean, the company was a huge company within the Smalls index. We never owned it. Yeah, obviously the Congolese government, I think, tried to nationalize the mine. When was that? Sort of in early 2022. Look, it's got a, I think by all accounts, it's got a huge lithium deposit. You know, we've seen these companies come and go numerous times. Look, yeah, I mean, for us, we wouldn't own it, so I'll, I have to say it's a sell. Thanks, Oscar. Worley, W-O-R. Worley. We own Worley. It wasn't in our top 20. I've reduced, we reduced it, it's just purely because the valuation was getting up there. Look, it's very expensive, the company, for what it does, which is an engineering contract at the oil and gas sector, but it's got a great thematic. I think one of the questions earlier on was, you know, around trends. Well, this is one of the, you know, the biggest trend in the world, really, and it's obviously, you know, moving to cleaner energy. Worley has basically transitioned their business to be, you know, the leader in terms of engineering capabilities in this space. I think at the moment, around 30% of their revenue is exposed and to clean energy, and it's, and it's, it's increasing at a rapid rate, and that's actually increasing margins. Look, Worley, w e reduced it into the result purely because it had a great run. Cash flow conversion, converting their earnings to cash has always been an issue for the business, and sometimes we see volatility around reporting season. That was my reason to reduce it. If we saw the shares go back into the early, you know, if we went back to AUD 15, AUD 16, we'd probably be a buyer. I'm gonna say hold. Long story. Thanks, Oscar. Let's see. Fenix Resources? F-E-N- Yeah, don't know. Sorry. Pro Medicus. Pro Medicus, probably one of the best stocks in the ASX. Trades at a ridiculous valuation, and probably made one of the best acquisitions any company has really made in Australia, of Visage a number of years ago. Look, had a great result. We own it within the portfolio. It is very, very expensive, the stock, but it's got an awesome management team. It's an awesome product. There's huge, high, very high margins, I think 60% margins, I think it does, from memory. And it's, it keeps winning contracts through the United States, so, well, and globally. For me, I think it's a hold. You've got to own it. Thanks, Oscar. That, I think, pretty much clears the stocks that we had coming through. Let's see. We've got one from Andrew. It's more about your investment process. He says, "I'm wondering if you only invest into small caps with a view to profitability or also in companies simply for capital value increase? There are miners, like Magnetite Mines, with great support from government and local companies in towns, as well as agreements with Aurizon. Are there any types of companies that you choose not to invest in, and why? Yeah, look, we never say no to any company. As long as it fits the process and, you know, whether it's a market-driven idea with a catalyst or it's a research-driven idea with a catalyst. I think the, you know, we've touched on this today, is the, the sectors we generally avoid, and it's the, it's probably mining, unless there's a really strong catalyst, probably oil and gas producers, real estate investment trusts, and biotech, because a lot of those, those catalysts with biotech are very binary. I think, yeah, and, and if we look at mining and oil and gas, very cyclical. Like, for us, we don't view ourselves, and this is the WAM Capital team. Certainly, this is different for the WAM Leaders team, but in terms of the WAM Capital team, we don't view ourselves as commodity, experts or where the commodity price is going. What we think is our sweet spot is really at focusing on an industrial company. In the mining space, for instance, we're probably rather, looking at a mining, mining services company or an oil services company such as WorleyParsons, which I talked about just before. Never rule anything out, but we feel our, I call it our wheelhouse or our hitting zone, is in those sort of industrial companies. Generally, the, you know, 9 x out of 10, the, the catalyst for us is generally an earnings upgrade because, you know, as Geoff will always say, it often, you know, the earnings re-rate or, sorry, the, the share price re-rate is actually better for you than an earnings upgrade. If, if investors think there's an earnings upgrade, generally the share price will, will respond very, very positively. I'd say that's generally the catalyst 9 x out of 10, and then there's often special situations where you think a company's gonna make an acquisition, they could make a divestment. On the market-driven side, there could be a director selling stock at a discount, it could be an IPO, et cetera. Yeah, I think, I think generally, 9 x out of 10, we're looking for an earnings upgrade in the process. Thanks, Oscar. Geoff Wilson, we might go back to you. We've got a question about the discounts again. Howard has said that the share price versus NTA slide, that one that we showed with the premium and discount, indicates a discount to NTA during periods of recession. With the global economy slowing, what strategies do you have in mind to manage the risk of a discount to NTA reemerging in the coming years? It's as we were talking about earlier, the shareholder engagement, you know, the communication, you know, it's, it's really those four things: performance, dividend, treating shareholders, you know, with respect, and having a, a really detailed communication engagement marketing strategy. I mean, historically, you know, the, you know, like, WAM is a, a lot different vehicle now than it was, back, you know, a number of years ago. How it works is, is really, you know, I remember first year economics, where they, you know, they show you on the, on the blackboard, the supply and demand, curve, and they show you where equilibrium is. That's exactly the same with, with listed investment companies. If there's more buyers than sellers, you know, and more demand at a, you know, then, then they'll trade at premium to NTAs. There's more selling than buying, and what happens is you, you tend to find out over time, your share register tightens up. You know, there's always gonna be movements. You look at, say, AFIC or Argo, which are the two biggest in the, in this space, you know, they have a very, I'd say 80% or 90% of their share registry. You know, they're 90, 80, 90, 100 years old. You know, 80% or 90% of their share register is very, very, you know, secure, and there's only a very marginal amount that trades. That's, I think WAM Capital is now in, is more in that category, in terms of, you know, we're, we're nearly through our 25th year. You know, I wouldn't think the, you know, the, the, that, that the extreme, it'll be as extreme in terms of the discounts. You know, what can we do to stop that? We can't. Like, the market's the market. You know, it's, it's sort of when, you know, when the, you know, when the GFC, you know, is occurring, you're thinking and valuations are becoming ridiculously cheap. You know, "Oh, this is ridiculous!" That's, unfortunately, that's the market. You know, these, these things happen at various points in time. What we can do is we can manage the money. We can, you know, really spend significant time communicating with shareholders, finding new shareholders, and, you know, what we do. Then if there's anything specific, you know, then, then we'll, we'll, you know, we're very happy to be flexible and pivot in terms of, you know, as we did during COVID. You know, when COVID started, the, the, you know, we thought, like, there was a high level of uncertainty. Now, we had, you know, how many, how many calls did we have in the early part of COVID? Are these sort of calls? Yeah. Oh, I remember I did one from Yass for, from my family farm. Yeah, I did a couple. Like, there was- Yeah, and like, we had thousands of people call in because, you know, there's a, there was a hard lot, you know, a significant degree of uncertainty. I mean, to me, you've got to pivot when you see. Effectively, it's what you see is occurring in front of you, you know, how you should address it. During, you know, when we went to a discount last time, we actually did a buyback, which was at NTA, which ended up being at a premium. To the, yeah, a significant premium to the share price. You know, so, you know, companies got to look at all those. You know, unfortunately, as I said, if this legislation comes in, then in theory, if you do a buyback, you're going to lose franking credit, so that mightn't be as palatable as it was back, you know, during the GFC. Thanks, Geoff. Brett has asked a question, just about the fees. What are the underlying fees charged on WAM? Yeah, 1% management fee and a 20% performance fee. The performance fee is on the outperformance of the All Ords, and, and it's only on positive performance. If the, you know, so if the markets, you know, it's not relative performance, you know, in terms of if the market's down 20% and we're down 10%, even though if we outperform by 10%, we don't get a performance fee. Thanks, Geoff. A different Brett has asked if you might not consider cutting the dividend slightly to help the NTA. Yeah, that, that's possible. Yeah, we could do that. Yeah, you know, at, at the moment, the board has decided. We just had the board meeting, you know, just recently because we just announced the dividend, and that was, that was one of the, one of the topics on the agenda. You know, do we cut the dividend? You know, then it means we've got. You know, then, then there's, there's more assets there. There's less paid out. Yeah, at, at this point in time, the board's decided to, you know, pay the final dividend of, of that and, and go on with the strategy. You know, now, like, you know, obviously a scenario that would work well is if there was, you know, if, if the portfolio performed well over the next couple of years, then, then the NTA increases and also the profit reserve increases. You know, so that you get the yield you're paying is on, it's a less of a yield because the NTA is increased. That's, you know, that's, that's a positive scenario. Thanks, Geoff. Oscar, back to you. Juliet has asked, "If you plan to buy into a stock in stages, do you ever decide it's become too expensive? And if so, at what point? That's a really good question. Thanks, Juliet. Well, we actually did that. Funny thing with this going, going into this reporting season is, you know, you know, previously, I've been talking about this afternoon, just in terms of, you know, we made a bet on the consumer space in June, May, June, for instance. It's funny, the market these days, it just moves so fast. That's what we always find. Ever since COVID, I don't know what it is, if it's the flow of information or, or whatever, it just, it, it happens really quickly. Nick Scali is a great example of that, where we bought, you know, We went into this reporting season probably 2/3 of the way set, which means, you know, we probably wanted to buy another 30% or 50% of our holding after this result. My, my reasoning behind that was I thought the result would be terrible, to be honest with you. It was funny, on the day of the Nick Scali result, I was trying to ring around to the stockbrokers saying, "Oh, this is a terrible result," hoping they're telling their clients that maybe the shares go down, but instead they went up, rocketing up. Yeah, it's a funny dynamic because. The reason why I say that is, is because Nick Scali, we started buying May, June, and then through that July period, the stock went up about 15%-20%, and it went up, what I thought was too much. We actually sold a few shares going into the result. In the end, the result was way better than what we thought it was, and there was additional catalysts. We actually, on the day of the results, stock went up about 12%. We actually bought on that day because it was actually a lot better than our numbers expected, but there was more catalysts, which is really important. You know, you, you've got to be willing sometimes. You know, we're, we're not always right on, on companies. It was a mistake from my behalf to actually sell shares in Nick Scali going into that result. Because there was more catalysts, we were still comfortable buying at 10% higher. Hopefully, that gives you a flavor of what we try and do. We're always trying to look 12-18 months in advance. What we saw sort of, you know, around in the small cap sector was, you know, this, you know, 30% of the small caps exposed to the economy are just so cheap and unloved, that if there was a shift in the market to this sector, you know, we'd see the share prices really, really go up a lot. That, you know, so far this reporting season, that's what's happened. Thanks, Oscar. The next question is from Warwick. He's asked, "What is the likely direction for the Australian dollar exchange rate, and what is the consequent impact on WAM's revenue through asset return? Okay. On, I mean, I don't know if that's one for Geoff, but just on the. I guess from a WAM Capital perspective, I mean, clearly, you've just got to make a call on those companies that are, you know, are there offshore earners in, in, in the portfolio? You know, their earnings will be higher as you translate that into Australia. You know, people that, companies that buy goods from overseas in U.S. dollars are gonna be disadvantaged. We've got to make those calls all the time within sectors within the portfolio. Generally, if you've got the company that's got a headwind on the Australian dollar, but it's got pricing power within its, its chosen field, then generally we've seen over time that concerns around the Australian dollar, as long as it's not a sharp reduction or a sharp increase, you know, they, they tend to be okay. Yeah, we've got to make a, a call on, on the companies in the portfolio on an individual basis, which we're sort of always constantly doing. What do I think the Australian dollar is going to do? I wish Matt was here, and he could give his view. The only thing I'll say, which is, we probably all know it anyway, but yeah, clearly, and I said it earlier, China, the data out of China is really weak. It's generally, you know, the fortune of the Australian dollar is all in China. And largely on commodity prices as well. If we see stimulus, economic stimulus within China, then, you know, potentially that might see the Australian dollar rise over time. You know, we think it probably is range-bound between, call it, AUD 0.62-0.67 for some time, particularly given we're it looks like the RBA has paused interest rates as well. I'm probably the worst person to talk to on the view on Australia, on exchange rates, to be blunt. Thanks, Oscar. let's see. I know you've talked about your views on the economy. Peter has just asked: The financial media is predicting a recession in 2024. Do you agree? How will that affect WAM Capital? I don't know. It's hard. I still I've been saying this for a while. I don't think it will. I don't know, I just think Australia's just gonna follow the US, largely, because I just think the immigration that's gonna come in here is just gonna be so, so strong. You know, certainly house prices have hardly fallen, really. I don't know. I still feel pretty confident that we won't go into recession. It'll be touch and go, there's no doubt about that. I, I think it'll largely play out a little bit better than what we all expected probably six months ago. That's sort of the feeling I have. How does it. Well, the interesting thing you ask, how does it impact us? You've always got to look forward. You know, six to 12 months ago, like, as I said, look, if you have a look at our performance, we actually did quite well against the small cap index. Why did we do quite well? Well, we didn't own companies exposed to the consumer 6 to 12 months ago, and a lot of these companies have fallen extensively over the last 6 months because the market is, is, is anticipating a really tough time for earnings and probably a recession in the next, you know, one to two years. If we fast-forward to today, this is why we've been buying these companies. We feel that that's too negative, and we actually think the earnings might get upgraded over time. Look, whether we go into recession or not, the, you know, the, the market always looks forward. I think from, from our perspective, there's always opportunities. We saw that last year. You know, we were very happy with our performance last year because it was really based off of a handful of stocks that did really, really well. Yeah, you can never. Well, learn, with the exception of 2022, which was an extreme situation, it feels like from our perspective, there's always opportunities, the investment process works, and you can always, you can always find very interesting companies. Thanks very much for that, Oscar. We are, we are getting to the end of everybody's questions. We do have two on the profits reserve, which, Geoff, I'll get you to just clarify, because they're both about unrealized profits. Let's see. Neil has asked, "You gave an example of starting, of Co. A starting at AUD 100 million and then making real and unrealized gains of AUD 10 million. Mm-hmm. If AUD 10 million was transferred to the profit reserve. Mm-hmm. Then the market reverses, and there are unrealized losses of AUD 2 million. Yeah. Is that transferred to the profit reserve as a negative figure, therefore reducing the profit reserve? Well, now, it really is up to how you want to account to it. You know, if it falls by 2 million, how we account for it is, you started with 100 million, the portfolio went up to, say, 113 million, paid AUD 3 million tax. There's AUD 10 million profit. You know, the profits put into the profit reserve, the portfolio then drops. It goes from 110 million after tax to 108 million after tax. That's the 2 million loss that you're talking about. The 10 million has already gone to the profit reserve, the 2 million loss will stay as in retained earnings. It'll actually be retained losses. That's why you'll see on the WAM Capital balance sheet, you know, if we've been topping up the profit reserve during the year and in the last couple of months, because you, you reset the profit reserve at the start of each year. The last couple of months, if there's a loss, then that stays in as retained earnings, which will end up being a retained loss. You, you used, you could still pay a AUD 10 million dividend. If you'd paid the tax or had the franking credits, it could be fully franked. Yeah. Is that that one, Olivia? Yep. Yep. Yeah, that's great. Thank you. Oscar? Yep. If you're happy, if you're happy, we'll just go through the last, the last couple stocks. Monadelphous, BHP, and Novatti, that's it for stocks. Okay. All right. Monadelphous, I think is a buy. I think they're through the worst of it in terms of labor cost pressures, so I think that looks, looks good into next year. I think that's a buy. BHP, that's not a stock we own. That's one for Matt, and I think. Well, they're definitely owned in their portfolio. I think they're overweight, Geoff. You know, Matt's or, you know, generally, the view would be that, you know, it's really tough in China at the moment. Stock's been hit hard, we're due for some, some stimulus, and the stock looks cheap. Novatti, I'd say a hold. Novatti, for me, sell. You know, I think from memory, the cash burn is, is too high, but relative to the cash they have at the bank. They need to take out some costs or sell their, their stake in Reckon. Yeah, I'd be a, I'd be a sell on that one. Thanks, Oscar. Geoff, we'll close with a stock pick from you, from David. I don't know if you're gonna like me asking this one, but David has asked, "Which is the best Wilson Asset Management fund to buy? Well, in theory, you guys are the biggest discount. All the biggest discount at the moment, I think, is in WAR. Yeah, WAM Strategic Value. That's, you know, I'd be. That's, that's the one I'd be buying. Had a good start to the year, too. It did. Absolutely good. That's made a very good start to the year. We've just got to get it to trade at NTA, if not a premium, then you'll be happy. That's the last question, it doesn't look as though we'll have to go back to too many questions. Again, you know, thank you, all. Yeah, on behalf of Oscar, you know, all the Wilson Asset Management team, Olivia, you know, thank you for your support. You know, we do this because we enjoy doing it. You've noticed over the last, you know, period, you know, the various questions of that you've thrown at us. You know, I hope that's helped you more fully understand, you know, how the company operates, you know, what the drivers are. By you understanding how we operate, then, then you can, you, you can observe what happens and, and, you know, make your investment decisions. Thank you again. Yeah, thanks for your support, and looking forward to seeing you at the, maybe the AGMs, or if not, the roadshows early next year. Thank you.