Lewis Jackson: Moving, I guess, to the outlook. So, you've been meeting – you've been traveling around the country for the last few weeks talking with clients. What are you advising clients to do right now? Are people talking about cash? You talked about some sectors earlier, energy, certain parts of resources. What are you advising people to do?

Peter Warnes: Well, firstly, it's too early to buy at the dip. And yes, we are a little bit divorced from what's happening offshore, but if it's collapsing them, our market will come back and there will be spots. I've never been in the market – I've been in there since 1968 where you read the paper – or no, you don't read the paper – where everything is red and there is nothing green and everything is green and there is nothing red. There are always things that people will want or attracted to or become attractive. So, the level of complacency is still too high for these markets to bottom.

We're seeing typical bear market rallies, but in my opinion, you haven't seen the bottom of this market yet. The US market has still got, in my opinion, some really meaningful downside. The gap between growth and value is still too great, and it will be fixed by top down, not bottom up. In other words, the valuations in the prices of the growth will come down and the value side, if you like, the value stocks will hold their own or probably come off a little but at way lesser rate than the growth. So, on that basis, one, capital preservation is key, and two, I'd suggest building some cash, because I do think you're going to get some opportunities. So, you got to be defensive in the portfolio or the equity part of your portfolio.

And the places I'd be looking, first of all, private equity has got a truckload of money. They have gorged on the liquidity that central banks have punched into the system, and they know that they've got to get it to work and the quicker they get it to work, the better. But they also know that replenishing the tank, one, is going to be more difficult because the liquidity is coming out of the system, and two, it's going to be much more expensive. So, they all can push that to work. And you've already seen how active they've been. I mean, they're rating things in our top ten, and nothing is too big for them. BHP is not too big for private equity. Don't think that's – so, I'd be looking at situations like strategic assets.

I'd be looking at Qube, have a look at where their strategic assets, get the map of Australia out and have a look at whether all the flags are. Under $3, I think, you should be looking at it. I'm not saying to buy it now but put that on your wish list. Similarly, Ampol. They've already had a nibble from Canada. Look at their strategic assets, not their petrol stations. The assets of storage, of diesel storage all around the perimeter of the coastline. So, distribution, those type of assets are strategic. Look at Aurizon, strategic assets. Don't worry about coal. Coal will still be mined in Australia and exported in Australia for the next 25 years minimum. And they've got strategic rail assets.

Elsewhere in the defensives, and again, wait for these things to come back – to be cheaper, but things like Endeavour, the recently listed Lottery Corporation, those type of assets just throw off cash, very, very little CapEx required, and those types of things. I still think like Woolworths if it gets to the low 30s, Wesfarmers below 45, they're the assets from a defensive point of view. The population of the world is still growing. How do you feed them? So, I'm looking at – we don't cover Elders, but the only food company that we kind of – that's linked to food or whatever is Nufarm, again making fertile ground more productive and what have you, and fertile ground around the world is shrinking. So, Nufarm. But watch what they're doing in the seed technology. That's what's caught my eye. And Carinata, another cover crop, they've already signed a deal with BP, where the product coming out of it could be used for a low carbon aviation fuel. They've already signed a deal with the BP. So, have a look at that type of thing.

Strange enough, in the building materials sector, there's only two companies I'm interested in. It's very, very cyclical obviously, but wait for the opportunity, wait for these things to come back. So, James Hardie is the number one – is the best company in that space by a long, long shot. Wait for it to come back to the, let's say, below 35. I think our fair values is 40.42. But let it come back a little further. And Boral also has my interest. One, they've sold everything they didn't want. They're now back to core. They've got big market shares in Australia in the markets they're in. Seven Group paid $7.40 for 70% of it. You've had a dividend and a cash capital return of $2.72, so effectively on an ex-basis $4.68. It's now through 3.10, so 35% discount to what they paid for 70% of it. Not saying it's happening tomorrow, but they can't control of the cash flow till they get a 100% of it. I'm not saying it's going to happen tomorrow or next month or next year. Some stage they'll probably move on it. But in the meantime, when our building cycle turns, Boral will be well placed to take advantage of it.

And the Australian banks, they're very, very sound and secure. You don't have to own four of them. You can just buy the bank you bank with. Otherwise, change banks if you're going to buy something else. So, I think that there are still some issues and stocks we can look at. But I still think I want you to be pretty cautious.

Jackson: Okay. Fantastic, Peter. Thank you for your time.

Warnes: Pleasure, Lewis.