Lex Hall: And I heard you talk about the other day talking about the companies that have been smashed and hopefully they'll come back. A company like Qantas, for example, which seemingly it's at the bottom. Is now the time for someone like me to buy Qantas because this is as bad as it gets and surely Qantas is going to fly again?

Anton Tagliaferro: Well, yes, it is, and its share price hasn't fallen that much when you take into account that they also raised a lot of money at $3.20. So, if you look at their market value today, it's probably not that different to where it was pre-COVID. It will be lower, but not that much lower. So, look, Qantas is an interesting one. I mean, it is still a cyclical company. Hopefully, eventually when the domestic borders open up, Qantas' domestic business will return to some extent. I don't think the business travel is going to return quickly and clearly, international travel is going to be some time off.

So, look, again, it's a matter of valuation. I think the thing that's very difficult about companies like Qantas is—and this is again—you know, you got two types of companies at the moment in a sense. You got companies that have actually benefited from COVID. So, you think about JB Hi-Fi, you think about Harvey Norman, you think about Bunnings. Now, you got to be very careful capitalising today's earnings into the future because at some stage when we do return to normal, people won't be going to JB Hi-Fi or—I mean, I go to Bunnings now I think more times in a month than I've been doing in a year, because you're stuck at home, whatever you have, that's—you know—so, that's going change hopefully when we're allowed to travel and do other things. So, one has got to be very careful with the companies doing well in terms of capitalising those earnings.

And with the ones which have been smashed, the Qantas, the Flight Centre, et cetera, it's very difficult to know when their earnings will return to some sort of normal. And that becomes a real judgment call and to some extent, a bit of a gamble. And I think the best guide is to look at what was the company valued pre-COVID as a whole and what it's valued at now. And one has got to be very careful. I heard somebody on the radio, a stockbroker, I think, the other day say, ‘Oh, Flight Centre is a good stock to buy because the shares were $50 in March and they are now at $13. So, they're down’. Well, that's not strictly true because what Flight Centre did was they had a one-for-one issue at $7. So, actually the dilution has been huge and the market cap at $13 is actually only 20% below where the stock was at $50. So, while the share price is low, the valuation is not that different to when Flight Centre was doing extremely well.

So, again, looking at the share price is not going to give you the answer, bit like with Qantas because it's issued so many shares at a lower price to survive, as has Sydney Airport, as has Flight Centre. So, you really got to look at the market cap. And as I said, to me—if you said to me, you can buy Flight Centre today at a 20% lower price than six, eight months ago, when everyone was traveling around the world, is that a good risk-return, I'd probably say no. I don't think that's probably—because it seems to me that companies like that and Sydney Airport, it's going to take many years for them to return to what they were earning six, eight months ago.

Hall: All right. Well, let's talk about another cohort, those going into retirement. What are the, sort of, go-to stocks for dividends that you would suggest?

Tagliaferro: Well, look, it's a very difficult situation. And look, I'm not that young myself. So, I've been thinking about my income streams going forward and I've got money in the bank luckily. I don't have any debt. And I'm rolling—I was offered 0.45 the other day by the National Australia Bank for a term deposit and I said, well, jeez (that ain't much drop). So, again, now then you look at the stock market and you go, jeez, my capital is going to be very volatile there and there's all these uncertainties going into 2021, really nobody really knows what the world is going to do. But then having said that, a number of companies which I've followed for 20 or 30 years, they don't change that much, and they will still be there in two to three to four years' time. And here, I'm talking about companies like Telstra, like Amcor, like Brambles, like Horizon, like QV Equities—actually we have an LIC called QV, which pay—they pay dividends regularly, et cetera, et cetera. They are good-quality companies. So, you have to look at those companies.

Now, I think, if you want to get some sort of income, unless you want to draw on your capital, you're taking a bit higher risk in terms of more volatility. But again, a good collection of good-quality industrial companies generally over time, you will look pretty good in three to five years and you own a real asset. Owning shares in, let's say, a collection of Coles and Amcor and Brambles, I mean, those are real companies. They ain't going to go away. They're going to be still be there generating cash not just in my lifetime, but probably beyond my lifetime, right? And in the meantime, you're going to get an income stream which is certainly going to be better than cash. Sure, your risk is high—I mean, in terms of your volatility of your capital will be high. But if you have a diversified portfolio of those sort of companies, that's one thing you have to look at, I think.

And then, this funny thing is, many of those companies when you look at Aurizon, Telstra, Brambles, Amcor, they're not trading anywhere near their 12-month highs actually. So, people talk about where do you get income, where do you get income? There's lots of actually very good-quality companies, I think, where you can get good income and they're not trading at their highs. What's trading at their highs is all this—you know, the more exciting kind of stuff, the froth and bubble, I call it, the Afterpays, et cetera. But these real companies, a lot of them I don't think are on that demanding valuation.