We Press the Button on KODK – QAV America #45

QAV AMERICA 45 Club

Cameron Reilly: [00:00:00] Welcome to QAV America, Tony, episode 45, recording this on the 24th of March, 2026. The Run, not a War, is in its fourth week.

Tony Kynaston: Mm-hmm.

Cameron Reilly: My, my Iranian friend from Kung fu, uh, before this all started, we knew it was coming. I said, what, how long do you think it will hap it’ll take when, when it starts. He goes two days.

Be over in two days. Regime will collapse. IRGC will collapse. Like two days. Yeah, two days. And we got to about day three, I said, how he goes, two weeks, it’ll be over in two weeks. By the end of the two weeks. I said, how long? He goes, four weeks. Four weeks. It’ll all be, it’ll all be done. So I said to him the other day, if we get into week five, you owe me a thousand bucks.

He goes, yeah, yeah. Four weeks. It’ll all be done. It’ll all be over. I said, I don’t know, man. I don’t know.

Tony Kynaston: we’ve just passed the 48 hour deadline before the, uh,

Cameron Reilly: Yeah, yeah.

Tony Kynaston: be eliminated from Iran, [00:01:00] and

Cameron Reilly: Mm

Tony Kynaston: KO event, hasn’t it?

Cameron Reilly: mm Well, as I said to you in the last show, I think he’s just buying time to get troops in position so they can land on island, do whatever else they’re gonna do. At the same time, probably massive parallel. Bombing campaign of the mainland while they try and get troops on Har Island, but, um, or wipe out Har Island.

I don’t know what his idea is. Who knows?

Tony Kynaston: Yeah. I am not sure if Har Islands a destination. It could be, but it’s, it’s also possible they’re gonna go after the drone, the drone sites or drone manufacturers with boots on the ground. So who knows? And look, you know, it’s, um. A lot of people are suffering through this, so

Cameron Reilly: Hmm.

Tony Kynaston: gotta shout out to anybody out there who is where, um, I’m thinking of you anyway, hopefully you get

Cameron Reilly: Well my Iranian friends are all for it. You know, they, they think it’s the, it’s fantastic what’s going on. ’cause they wanted to see the end of the [00:02:00] regime and they figured this is the only way it would happen is through some sort of foreign intervention. But I’m always like, y you know, it’s never worked.

Foreign re regime change never works out well. And if. It was gonna work out well. You don’t want Netanyahu and Trump being the guys that are orchestrating, it’s like the worst possible scenario, uh, these two clowns, uh, trying to run it. But anyway, here’s what it is.

Tony Kynaston: Yeah. Well, and, and also too, the Wall Street Journal was reporting today that uh, a lot of the dissidents who’d been rounded up and put in prison who would lead regime change were almost bombed, um, recently. So that’s not a good way to get regime change. It’s to bomb all the people who were in mon bla who could do it.

Cameron Reilly: Yeah, and guys like the, uh, the foreign minister Lani, um, who was, they thought was [00:03:00] gonna be the reasonable, moderate, you know, relatively moderate guy. They killed him. So that’s not gonna happen. Anyway, back to investing. So it’s obviously been another turbulent week in the markets. The oil price has gone through the roof, came back a little bit yesterday.

Where? Or last night? Our time when Trump said that he’d decided the 48 hour timeline. Wasn’t that Mabb hard of a timeline after all, but then when I checked the price an hour or so ago, it,

Tony Kynaston: negotiations and the Iranian said what?

Cameron Reilly: yeah. Yeah. Well there are different stories coming out of Iran today. Some say there’s no discussions, some say there are discussions sort of happening, three or four steps removed. I think the US is talking to Turkey, turkey’s, talking to Iran, something like that. It’s uh, impossible to know what the truth is.

[00:04:00] There’s lies and propaganda. Well, no one really knows. Um, what’s happening to the Ayatollah Kama Khomeini? Uh, I’ve heard that he’s in a coma. I’ve heard that he’s injured, but it’s not threat life threatening that he’s conscious. He’s just in a bunker. I’ve, there’s all sorts of different stories coming out of Iran.

No one really knows again.

Tony Kynaston: Fog of war.

Cameron Reilly: Yeah,

Tony Kynaston: Mm.

Cameron Reilly: again, what we do know is that, uh, over the course of the last week, the s and p is down. All the indexes are down. Uh, recovered a little bit in the last 24 hours, but we’re not back to where we were a week ago. And our portfolio, um, our American portfolios, surprisingly not doing too badly actually.

Uh, all things considered our US dummy portfolio, the one that’s been running for a couple of years is down about eight. Percent over the last 30 days [00:05:00] versus the s and p 500, which is down about 5%. But if I take the last, uh, year to date, we’re actually still up 17% versus the s and p down 4%. So, you know, relatively speaking, we’re doing all right.

If I take all time, we’re up 92% versus the s and p up 48%. That’s going back to September 23. So doing all right, the light portfolio, which I only started the American Light portfolio, I started just before Christmas, a week before Christmas, all time. Well, since then, it’s down 0.25% versus the s and p down 4.3%.

So. It’s not, it’s not doing great, but it’s not doing as bad as the index at this stage. And surprisingly, in the last 30 days, the light portfolio is actually up 2.3% versus the s and p [00:06:00] down 4% because we’ve added a number of oil stocks to it in the last month, like Cord Energy, eco Petrol, and Murphy Oil, which are all doing quite well.

Uh

Tony Kynaston: I guess two comments on that, Kim, if I can. But in, um, the, the first thing is oil could turn around again tomorrow, so those oil

Cameron Reilly: Turned down,

Tony Kynaston: turn down again. Sorry, those oil stocks might be sales, you know. the other point I wanted to make, and probably the more important one is we don’t know what’s happening with the oil price.

We’re not to favor one sector over another. It just happens. We look back in a couple of months or we look back now after a month and say, Hey, we have a lot of all stocks, and weren’t we lucky?

Cameron Reilly: hmm.

Tony Kynaston: like that, that’s happened to me all the time. E

Cameron Reilly: Mm

Tony Kynaston: since I’ve been an investor. Last year it was gold stocks.

Cameron Reilly: mm

Tony Kynaston: we, we don’t know in advance which sector’s gonna be favored. It’s just that we find things to buy in a particular sector [00:07:00] and then we turn around and say, Hey, weren’t we lucky to have those stocks in the portfolio?

Cameron Reilly: mm Well, you know, if we look back over the last couple of years I’ve been running the US portfolio, we know we had a lot of shipping companies and financial services companies that we were adding for a while there who have all done very, very well, even though some of them have come back a lot in the last, uh, couple of months, still have had tremendous performance in over international ENVA, which is an online financial services company, is up 130% since we added it.

Euro CSEA is up 136%. They’re in the shipping business, obviously with a name like that. Uh, Willis Lee’s Finance Company, uh, not surprisingly, is a finance company. Commercial aircraft and aircraft engines is what they’re mainly involved in. Financing. They’re up still 270% even though they’ve come [00:08:00] back a long way in the last uh, month, they’re still up nearly 300%.

So yeah, these were different sectors that our system put us into when these stocks were under value, and we were talking about this on the Australian show, um, when markets are volatile like this, relatively new investors might think the sky is falling and they become chicken little and they panic. But I’ve been doing this show with you now for six or seven years, and I think this is the fourth crisis I’ve seen.

In that period of time, you’ve been investing for 35 years and you’ve seen what you say every couple of years, every two years there’s one, right? Yeah.

Tony Kynaston: So they’re not, so each crisis is unique in its own way, but then, but the crisis is not unique.

Cameron Reilly: Yes.

Tony Kynaston: Hmm.

Cameron Reilly: And as I’ve learned by doing this over the last seven years, what a crisis means is [00:09:00] stocks good companies, companies that generally perform well, even though they might stumble during a financial crisis for one reason or another, end up cheap. And then they turn up on our buy list and we buy them because we buy when our system tells us to buy, regardless of what’s happening in the market or where, how, what the general level of panic is or is not.

And we tend to then buy things when they’re cheap. And then when the market relaxes, its sphincter and uh, starts. Going through, uh, greed, a greed phase, everything goes up and we ride that up and, uh, we, we end up outperforming the market again. And then, you know, we’ve got buffer that we ride down a little bit when the market crashes and then you rinse and repeat, right?

Tony Kynaston: Yep.

Cameron Reilly: It’s fairly simple, but it’s only, I think after you’ve survived a couple of these that you go, oh, okay, [00:10:00] this is normal. Crisis is normal.

Tony Kynaston: I can step back and look at this at the sort of slightly higher level. Yeah.

Cameron Reilly: Yeah,

Tony Kynaston: Mm-hmm.

Cameron Reilly: yeah. This is, this is like I’ve talked about on shows before. This is like, winter follows summer, you know, winter doesn’t come and you don’t panic and go, that’s it. We’re gonna be dark and cold forever. You go, okay, this will last for a few months and then we’ll be back to spring and summer again and they’ll be buying opportunities at the end of winter.

So just, uh, put your, put your jumper on. Light a fire, get your pipe out some port and ride it out. Right. Just wait, be patient. Yeah, it does, doesn’t it? And here I am sitting in Brisbane where it’s autumn, where at the end of the first month of autumn, and it’s still insanely hot and humid here and rainy and crazy.

Tony Kynaston: Brisbane’s like, uh, Brisbane’s, like Florida for our US listeners

Cameron Reilly: Yes. Without all the crazy,

Tony Kynaston: [00:11:00] Well, there’s plenty of crazy people in Queensland, but

Cameron Reilly: yeah. Yeah. I was thinking about, uh, Pauline Hanson. Yeah. Yeah. Well, Tony. Let’s jump into my deep dive for the week. Uh, for people that are new listeners, what we do on this show each week is I look at our buy list for the week and I pick a stock that’s up near the top of our buy list, something that we haven’t seen before or haven’t talked about before.

And I do a bit of a drill down into it, a deep dive of what we call a pulled pork for reasons that are beyond me. It’s an historical thing that we came up with years ago. I can’t remember what it was.

Tony Kynaston: As a pull apart.

Cameron Reilly: A pull apart. That’s right. It was a pull apart. Became a pulled pork. This week, Tony, for my pulled pork, I am doing Eastman Kodak, a very old, very famous brand that today has very little to do with what people think it does,

Tony Kynaston: Hmm.

Cameron Reilly: [00:12:00] that’s what makes it interesting.

Um. Un unfortunately, or fortunately, it’s not one of those stocks that I’m used to doing where there’s like lots of deaths on their doorstep. I don’t know, it’s, it, there’s not a lot of, uh, manslaughter charges or there is a little bit of environmental damage that they’re responsible for, but

Tony Kynaston: the death of an industry.

Cameron Reilly: the death of an industry.

Yes. Yeah.

Tony Kynaston: Eastman through tragic

Cameron Reilly: here’s a question for you. What is the relationship between Linda Eastman slash McCartney and Eastman Kodak?

Tony Kynaston: Wasn’t she the, or? She’s the daughter of one of the Eastmans. Um, not sure if it was the Eastman that founded it, or the great grandfather was the founder, but yeah, that’s the li lineage.

Cameron Reilly: In fact, none of that is true. You fail, uh, you go to the bottom of the class, [00:13:00] her father.

Tony Kynaston: I can heckle from the bottom of the class. Great.

Cameron Reilly: Her father, a prominent entertainment lawyer named Lee Eastman was actually born Leopold Vale, Epstein, and changed the family name to Eastman before Linda was born.

Tony Kynaston: Oh, that’s a rumor, isn’t it? I always thought it was true.

Cameron Reilly: It is a rumor that she occasionally encouraged early in her career as a photographer.

Tony Kynaston: gonna say, she carried a camera around, didn’t she? Yeah.

Cameron Reilly: Well, she was a photographer and she was like, yeah, yeah, Eastman.

Yeah. Yeah, Kodak. Sure. Uh, later on in life, she admitted that she had no relation whatsoever because that I thought that was true and I looked it up and Yeah. Not true.

Tony Kynaston: So I should change my family name to Van Gogh. So Alex gets a leg up in the, in the

Cameron Reilly: No Buffet. Change it to Buffet. Yeah. Yeah. Buffet. Yeah. Me and Warren. Sure, sure. So the company. That invented digital [00:14:00] photography but didn’t know what to do with it. And I had to say like on the surface of it, when I first came across this in our buy list, and it was at the top of our buy list, our American buy list this week, I should say, it looks like a classic value stock to me.

You know, company that used to be riding high had to reinvent itself,

Tony Kynaston: It’s

Cameron Reilly: still making money, but uh, doesn’t have the brand that it once had, but it, so it’s not sexy at all. It’s best days along gone, but it still makes money and it’s doing some interesting things. So obviously those of us of a certain age, you think Kodak, you think little yellow boxes, envelopes that took a week to be ready and then you’d find out that most of them were blurry or you’d cut the head off and all of that kinda stuff.

Tony Kynaston: to pay for them. Yep.

Cameron Reilly: Yeah. I dunno if the kids of today have any sort of [00:15:00] connection with the Kodak brand whatsoever. Um, anyone under the age of 40, I don’t know. But

Tony Kynaston: Well,

Cameron Reilly: for us it was a big deal

Tony Kynaston: yeah. And Jenny’s first job out of university was working at Kodak in Coberg in Melbourne.

Cameron Reilly: really in like

Tony Kynaston: A factory. Yeah.

Cameron Reilly: in the finance department. Was she like,

Tony Kynaston: in fact.

Cameron Reilly: right.

Tony Kynaston: Hmm.

Cameron Reilly: There you go. Well, these days they’re basically a chemical company, commercial print tech, and somewhat controversially pharmaceutical ingredients, which we’ll get into.

Tony Kynaston: involved in print, in photographs.

Cameron Reilly: Hmm. And it was a Donald Trump idea that they get into pharmaceuticals

Tony Kynaston: Good. That’s great.

Cameron Reilly: and a little bit of insider trading involved in the process. That’s the only real scandal we’ve got here.

Tony Kynaston: that goes with, that goes with the turf, doesn’t it really?

Cameron Reilly: It does, doesn’t it? With the grifter in chief. It’s been a bit of a difficult transition for them along the way. They went bankrupt in [00:16:00] 2012, wiped out their legacy shareholders, a lot of downsizing Today.

They’re led by CEO James Conza. Not to be confused with George Costanza and all my notes, I kept just writing Costanza Can’t stand you. Uh, he’s a restructuring, restructuring specialist who actually had joined the board before they went bankrupt

Tony Kynaston: Right.

Cameron Reilly: and, uh, helped them navigate that period and then ended up as the CEO.

And he’s spent the last five years turning them around. He is implementing what he calls the one Kodak strategy, which is basically eliminating corporate silos of which you could well imagine with 140 odd year old company they had. Quite a few. He’s been paying down debt, monetizing their huge patent portfolio

Tony Kynaston: mm.

Cameron Reilly: their real estate holdings.

So [00:17:00] he’s been stripping it down and figuring out what assets they have that can actually be made a little bit more profit. He’s doing a good and g go really? He’s like stripping it back and, um, figuring out what are its undervalued assets, you know?

Tony Kynaston: you read about the pension fund as part of that

Cameron Reilly: I did, it’s the last part of this story. Yeah.

Tony Kynaston: it then.

Cameron Reilly: Yeah. Which is a brilliant story.

It’s, yeah, it sounds really impressive. Anyway, let’s do the origin, uh, ’cause this is the fun bit, really. So founded in 1880 by George Eastman. No relation to Linda McCartney

Tony Kynaston: All the Epstein’s.

Cameron Reilly: as a partnership between George Eastman and Henry. A strong Eastman was, uh. A camera buff cameras were around before Kodak, but he, he was interested in it.

They started making plates, but ended up making [00:18:00] invented film, uh, cameras. And then they became, obviously one of the world’s largest film and camera manufacturers, and also developed a model of welfare capitalism built around the city of Rochester, New York, which I nearly moved to in 1998 when I was part of Microsoft.

I got a job offer

Tony Kynaston: Hmm.

Cameron Reilly: to be part of the Microsoft office in Rochester. Um, didn’t end up taking it, but, uh, yeah, I, I’ve always wondered what my life would’ve been like if I’d

Tony Kynaston: Yeah,

Cameron Reilly: to Rochester, New York. They, the company was so influential that the Kodak moment tagline ended up in the dictionary. For kids of a certain age that, dunno what that means.

Sort of a moment to be recorded for posterity. Everyone, you’d go, oh, that’s a Kodak moment. You know?

Tony Kynaston: Oh, okay. I thought you were looking at what the dictionary was.

Cameron Reilly: Yes. If you dunno what a dictionary is, we have bigger problems. [00:19:00] Um, they began to struggle financially in the late 1990s as a result, initially of just increasing competition, mostly from Fuji film. They really, they dominated the film space for a long, long time. And then they started to get some competitors, but then they developed the first self-contained digital camera prototype in the mid 1970s.

Tony Kynaston: Wow.

Cameron Reilly: was a guy who, a guy, one of one of their research guys there, who was convinced that digital photography was gonna be the future. They did a lot of work in that area, but then didn’t. Didn’t run with it soon enough. They did run with it eventually, but uh, weren’t able to execute on it and it was just too hard to lock it down.

Uh, there was too much competition. They continued to provide commercial, digital printing, uh, products and services, motion, picture, film, and even still film, [00:20:00] which still exists today, somewhat surprisingly. There is still, they spun it off a, a few years ago to a company called Kodak Alaris, which I think is owned by a private equity firm now it’s based outta the uk, but they still make Kodak film.

You can still buy Kodak film, put it in your retro Kodak film camera and, and get it, uh, developed. There are still people that are into that kind of thing. Actually, that reminds me of that film I told you about a few weeks ago. The, um. Japanese film. There’s a Vim Vens film, but in Japan,

Tony Kynaston: The

Cameron Reilly: main,

Tony Kynaston: toilet cleaner.

Cameron Reilly: yeah, the toilet cleaner.

I can’t remember what the name of the film is now, but that character, uh, that’s what he does. One, one, uh, each week he has a roll of film and he’s got an old time camera Instamatic or something, and he just sits and he takes photos mostly of trees, takes photos of trees or of people, and then [00:21:00] he goes in and he gets it developed, and he waits a week.

It’s part of the whole slow living thing that he does. He reads one book a week. He, he uses one roll of film a week. His, his life is built around simplicity. Yeah. Yeah. But it’s kind of enticing, I’m not gonna lie. Like this whole idea of just limit yourself to, huh.

Tony Kynaston: would be, you’d be bored.

Cameron Reilly: I know you’re like, I’m reading 20 books at one time.

You know, I’m like, I read five books at night. I don’t know if you’re like that, but I’ll lie in bed at night and I’ll read, you know, um, Frederick Forsyth for half an hour, and then I’ll go, okay, I, I need something else now. So then I’ll open up a history book or a science book, or I have to flip between.

Yeah.

Tony Kynaston: Yeah. I think we’ve been conditioned by social media because I’m, I’m the same. I like, I’ve got about, I don’t know, uh, 10 books sitting beside my armchair,

Cameron Reilly: Mm-hmm.

Tony Kynaston: I’ll go, okay. I’ll start to read this one. And if I doesn’t [00:22:00] take after a, you know, a couple of pages, I’ll put it down and try the next one. And eventually one will take, and I’ll read a chapter or two, and then I’ll get bored with that.

Cameron Reilly: Yeah. Well, I’m reading them concurrently because my brain needs bit of this stimulation, bit of that stimulation, bit of this I need to need, I need, I need all of the, all of the slots filled before I feel good at night.

Tony Kynaston: should, we should write an app to like, do that for books, TikTok for books,

Cameron Reilly: Just like give you a page and then you flip to another page and you flip to another page. Yeah.

Tony Kynaston: on your reading habits,

Cameron Reilly: Uhhuh.

Tony Kynaston: we think you’ll need this

Cameron Reilly: Yeah. Here’s what you,

Tony Kynaston: Yeah.

Cameron Reilly: here’s what you need to feel okay about yourself, because I’m like, I’m enjoying the Dessa file, but then part of my brain is going, okay, you’re learning a little bit about concentration camps and rat lines, but you already know that ’cause you’ve covered it in your history podcasts.

You haven’t read any science today. What are you doing? Well, you’re wasting your life. You need to, you need to read a little bit about [00:23:00] quantum, quantum mechanics. Just stop doing.

Tony Kynaston: for? It’s a great app. TikTok for TikTok for books.

Cameron Reilly: Yeah. You know how many of us read books?

Tony Kynaston: your

Cameron Reilly: It’s like you,

Tony Kynaston: like,

Cameron Reilly: you and me are the only people that read books anymore. Tony and the entire planet.

Tony Kynaston: true.

Cameron Reilly: Tamino was telling me the other day that he’s writing another book, and I go, why? No one reads apart from us? He reads and he said, yeah, you don’t get it. It’s not about people reading it.

The writing of the book forces me to think about things. I, yeah, it was like when we did the psychopath epidemic,

Tony Kynaston: Mm-hmm.

Cameron Reilly: you know, it, it was the writing of it. That was the interesting bit. Um, you know, I had to think through the model to write it. Um, the fact that no one read. It’s disappointing, but that’s,

Tony Kynaston: Yeah. But it’s like it,

Cameron Reilly: no one reads,

Tony Kynaston: with me. I think it was in a, in med school that I had a girlfriend who was in med school.

Cameron Reilly: I thought you were gonna say you did med schoolers. I go, what?

Tony Kynaston: I used to go up to anatomy classes. But, [00:24:00] um, they had a, a philosophy, I think it was something like, learn one, teach one, do one.

Cameron Reilly: Right.

Tony Kynaston: So you’d, you know, you’d learn about a disease, you treat, teach about the disease, and then you’d have to go and

Cameron Reilly: Then you go catch the disease and, and see what it was like

Tony Kynaston: But it’s like, that’s the epitome of learning, isn’t it, of education.

Cameron Reilly: you just turned up to anatomy classes. Uh, I bet you did. Yeah. Female anatomy just did, they were the classes,

Tony Kynaston: on the slab.

Cameron Reilly: right. Female cadaver.

Tony Kynaston: There was, it was a mixture.

Cameron Reilly: Sure.

Tony Kynaston: There were,

Cameron Reilly: Anyway, back to Kodak. Stop distracting me.

Tony Kynaston: it’s formaldehyde,

Cameron Reilly: Oh, yeah.

Tony Kynaston: bodies. Yeah. It’s like, um, you know how if you put chicken in the fridge after you’ve, um, cooked it

Cameron Reilly: Mm-hmm.

Tony Kynaston: day, it’s got

Cameron Reilly: Mm-hmm.

Tony Kynaston: to it.

Cameron Reilly: Hmm.

Tony Kynaston: hungry, but that’s, that’s what it reminded me of, sort of brown crinkly skin and, uh, yeah. [00:25:00] Old flesh.

Cameron Reilly: Wow. You’re creeping me out now. So. Kodak Alaris. Then, as I said, they started producing pharmaceuticals during COVID, but we’ll get into that. The name Kodak. Tony, you wanna take a guess at what it means,

Tony Kynaston: don’t

Cameron Reilly: it comes from?

Tony Kynaston: is, were they like really big Kelly surveillance fans?

Cameron Reilly: Hey, we’ll just take Kojack and we’ll just change your letter.

Tony Kynaston: Yeah.

Cameron Reilly: Well, the other way around.

Tony Kynaston: They tried to call it Kojak, but they got copyrighted.

Cameron Reilly: Yeah. In 1880. Yeah. Um, Kodak Elli Vals came back from the future and threatened them with a lawsuit.

Tony Kynaston: Rockwell.

Cameron Reilly: Yeah.

Tony Kynaston: Yeah.

Cameron Reilly: The name means absolutely nothing. It was invented by George Eastman using an anagram set, like a Scrabble set.

Tony Kynaston: like Linda Eastman.

Cameron Reilly: Like Linda Eastman invented her relationship. Yeah, apparently he liked the letter K. He thought there was [00:26:00] something about the letter.

He thought there was something about the letter K that was distinctive. It cut through, it was sharp, and so he was mucking around with the Scrabble board letters and he came up with Kodak. The company was actually originally called the Eastman Dry Plate Company, was founded on January 1st, 1881 with Strong as President and Eastman as treasurer Strong.

Henry Strong. His partner was previously running his family’s buggy whip manufacturing company

Tony Kynaston: Warren Buffet always warns about buying buggy whip companies,

Cameron Reilly: because no one has a buggy anymore.

Tony Kynaston: Yeah.

Cameron Reilly: Yeah,

Tony Kynaston: he, when he talks about value investing, don’t get caught with the buggy whip company,

Cameron Reilly: right.

Tony Kynaston: which

Cameron Reilly: Well, I think.

Tony Kynaston: He, Kodak was what he was talking about.

Cameron Reilly: Right. Well, I think Strong was smart enough to realize, you know, buggy whips are on their way out. This, this camera thing might be the future. [00:27:00] It was like the high tech startup of 1880. So the company initially sold dry plates for those old timey cameras. But then Eastman started thinking about replacing the plates with a new roll film process.

In 1885, he patented the first practical film roll holder with a guy called William Walker, which would allow dry plate cameras to store multiple exposures in a camera. Simultaneously that same year he, Peyton did a form of paper film. He called American Film. Then he hired a chemist, Henry Ricken bark to improve the film.

He went on to invent Paul McCartney’s bass guitar just to. Close the loop on the McCartneys.

Tony Kynaston: they named the falls after him in, uh, in, uh, Holmes. The Uck Falls

Cameron Reilly: Oh, I don’t remember that one.

Tony Kynaston: [00:28:00] Holmes goes over to Uck. Falls with Moriarty. Mm-hmm.

Cameron Reilly: Oh, okay. Right. It’s like in the TV series when they went over the building, went off the rooftop. Yeah. Right. Um, and then

Tony Kynaston: that was

Cameron Reilly: that

Tony Kynaston: not the TV show. It was in the book. You have to

Cameron Reilly: In the book. Yeah. Yeah, yeah,

Tony Kynaston: Yeah.

Cameron Reilly: yeah. Then that culminated in the 1889 patent for Nitrocellulose film. Then in 1888, the Kodak camera was patented by Eastman.

It was a box camera with a fixed focused lens on the front and no, no viewfinder. It had two V-shaped silhouettes at the top that aided in aiming in the direction of the subject. It had a rotating key to advance the film, a pull string to set the shutter and a button on the side to release it, which exposed the celluloid film.

Inside. It had a rotating bar to operate the shutter. When the user [00:29:00] pressed the button to take a photograph and in a rope was tightened, and the exposure began. Once the photograph had been taken, the user had to rotate the upper key to change the selected frame within the celluloid tape.

Tony Kynaston: That really is high tech for the. Isn’t it? It’s

Cameron Reilly: It’s incredible.

Like the amount of thinking that had to go into that to figure it out sort of reminds me a little bit of the printing press when I, I did a whole series on Gutenberg coming up with the printing press and like you, I was talking to Chrissy about this this morning. Like you just think about the impact that film cameras had or cameras had on

Tony Kynaston: Yeah.

Cameron Reilly: civilization and history and you know, whatever over the last hundred years.

Like it’s a non-trivial, bloody invention and, and component of society.

Tony Kynaston: Yeah. So before the film camera, you wanted to, to capture a scene, you [00:30:00] hired a painter and they spent a day sketching and, and taking, you know, uh, drafts of it and then going away for a month and coming back with your landscape or your portrait or whatever. Yeah.

Cameron Reilly: And if you hired Leonardo da Vinci, good chance he wouldn’t finish it.

Tony Kynaston: right.

Cameron Reilly: I won’t mention anything about my commission for Alex. She, she’s the Da Vinci, you kindest and Da Vinci.

Tony Kynaston: to then.

Cameron Reilly: Da Vinci. Yeah. So then they sold a $25 camera, which came preloaded. You’ll love. This came preloaded with a film roll of a hundred exposures.

When you finished that, you sent the entire camera

Tony Kynaston: Mm-hmm.

Cameron Reilly: to Eastman headquarters in Rochester with a $10 fee for processing. They would then process it for you, ’cause people didn’t have dark rooms and whatever to process their [00:31:00] own stuff. They would return the camera with the prints, the negatives, and a new roll of film.

You could also. Uh, get a $2 roll of film. If you’re a prote professional photographer who could develop your own, you can buy ’em for two bucks,

Tony Kynaston: Right.

Cameron Reilly: like pretty amazing full service business model. I dunno how much it would’ve cost you to ship a huge bloody box camera with the film in it to Rochester and get it sent back to you.

Can’t have been easy or trivial, but it was an immediate success and launched a fad of amateur photography. Their advertising slogan, Barry and Stan came up with this. You press the button, we do the rest.

Tony Kynaston: Good.

Cameron Reilly: Fantastic. Like, absolutely killer advertising, killer business model. One stop. We do it all like really, really impressive stuff.

Wanna take a guess at [00:32:00] what year the Brownie camera was marketed to children for the first time?

Tony Kynaston: Ooh. I’m gonna say it’d be like in the 1910s that decade, then 1915 maybe.

Cameron Reilly: I would’ve guessed the 1950s. It was 1900.

Tony Kynaston: Wow.

Cameron Reilly: released a camera for kids.

Tony Kynaston: Wow.

Cameron Reilly: Boggles my mind. So then they basically cornered the market when Thomas Edison and other film producers formed the Motion Picture Peyton’s Company in 1908. Uh, Eastman negotiated for Kodak to be the sole supplier of film to the industry.

So they locked all of that down

Tony Kynaston: It’s a good

Cameron Reilly: and

Tony Kynaston: he?

Cameron Reilly: yeah, really, really impressive, impressive guy.

Tony Kynaston: Hmm.

Cameron Reilly: Um. I mentioned before, they developed this version of welfare capitalism in Rochester. So they built a basically a, a a a village in Rochester. All of the employees lived there. [00:33:00] And during the 1910s and 1920s, it was sort of the vanguard of welfare capitalism.

There was a number of those experiments I’ve read about. Really? Ford was one I didn’t know about that

Tony Kynaston: He, I, I’m thinking

Cameron Reilly: thought he was a

Tony Kynaston: rubber plants in South America. He built a village and provided for the

Cameron Reilly: right,

Tony Kynaston: Yeah.

Cameron Reilly: right. Well this is in America. There was a number of these sort of, I can’t remember the other one. There was, um, like water, not Waterford, crystal, um, who does the China, uh, the, it’s not Waterford. Wedgewood. I think Wedgewood was one of these guys. So, no, he was British, wasn’t he?

Tony Kynaston: Yeah.

Cameron Reilly: there was another company in the US that had one of these sort of welfare capitalism cities where they looked after their employees.

But of course, you know, if you know anything about. Early American capitalism. Employees were treated like animals. It was, you know, basically wage slavery at its worst. Workers had no rights. They were working long hours for [00:34:00] little pay. If they tried to go, there weren’t any unions if they tried to go on strike.

They would call in, um, troops to beat them and shoot them and whatever. They would terrorize them to get back to work. And there was really no laws to stop them from doing that. Most of the businessmen bribed their local senators and congressmen anyway, and it was, it was a very, very brutal time for employees in the early 20th century, which is one of the reasons why socialism was so popular around the world, even in the West in that period because workers were mistreated and they were fighting for, for more rights.

And that was apparently Eastman’s rationale here. He thought, well, he was terrified of labor unions and believed that the way to prevent his workers from unionizing was to look after them. Like, wow, what a concept. Um. So [00:35:00] he offered life insurance, disability benefits, retirement annuity plans for employees, um, profit sharing program for all employees.

In 1912. In 1919, he sold a large portion of his stock in the company to company employees below market value. He was just, uh, way ahead of his time. I mean, really believed that looking after his employees served, the best interest of the company wasn’t doing it. I think because he, maybe he did care about his employees, but he also cared about the success of the business and thought if you pay people well and look after them, they’ll be loyal and they’ll do the right thing.

Right? They’ll work hard.

Tony Kynaston: attract better talent too.

Cameron Reilly: True. So, uh, he also thought that selling stock to employees would make it more appealing to investors because a lot of investors were, uh, wary [00:36:00] about the amount of stock that he controlled. So he was diluting his control over the business and it also lowered the price of the stock, and it would keep antitrust lawyers from investigating the company or that kind of stuff.

Unfortunately, it’s not all good. Um, he refused to hire Catholics, African Americans, and Jews, but like Henry Ford. Um, and, but approximately one third of his employees were women. So a little bit progressive, not, not totally progressive in his thinking at the time, but you know, no one’s perfect.

Tony Kynaston: Unless you’re a black Catholic, then you Buckley.

Cameron Reilly: A black Catholic Jew. Yeah. Then you’re in trouble. 1972. Dr. Roger Van Heen. Which sounds like a name that, uh, Chevy Chase would come up with in a Fletch movie, except that would be Roger Van Heiden. J [00:37:00] Jensen can, he was the director of the physics division in Kodak Research Labs, KRL. He was the guy that was convinced that digital imaging would someday replace photographic film, and he established a small lab where they began investigating the basic processes of metal oxide, semiconductor technology to manufacture charge coupled device image sensors, CCDs, which every iPhone Android phone today has a highly advanced CCD in it for taking photos.

Larry Madison, another employee, wrote a report in 1979 predicting a complete shift to digital photography would occur by 2010. So.

Tony Kynaston: Very

Cameron Reilly: They had guys that could see this coming, but it’s uh, what was Clayton Christensen’s book? The, [00:38:00] um,

Tony Kynaston: is that the, uh, entrepreneur’s dilemma?

Cameron Reilly: the Innovators, innovators Dilemma,

Tony Kynaston: Yeah.

Cameron Reilly: I think, yeah. When you, when you basically have a company that makes its money from one paradigm, uh, the replacement paradigm is gonna cannibalize that business and corporate culture makes it very difficult to make that transition. And they were also very skeptical the company executives about making the leap because it would require heavy investment for what was at the time, a very limited market

Tony Kynaston: Yep.

Cameron Reilly: and would put the company into direct competition with established firms in the computer hardware industry that they thought could probably build these CCDs

Tony Kynaston: Right.

Cameron Reilly: more economically.

As it turns out, they were right, but, uh, what do you do? Do you just not do it and let the computer industry come and crush you anyway,

Tony Kynaston: Yeah.

Cameron Reilly: is what happened. But that said, [00:39:00] by 2005, Kodak were number one in the US in digital camera sales, which were running about $5.7 billion a year. At the time. It was a huge space.

So 2005, they were,

Tony Kynaston: I don’t remember Kodak digital cameras being that big

Cameron Reilly: yeah, I do. I remember. I remember surprisingly, they pivoted very early on and just seemed like they had navigated the space very well. Can’t remember what it the camera was called, but it was like. Easy snap or easy pixel or something like that. I think I had one. They were shitty. I mean, I have photos still.

’cause you know, my, my kids were five, um, about the same age as Alex. We had like one of those, I’ve got photos from ’em, they’re like three 50 by three. Like the,

Tony Kynaston: Yeah.

Cameron Reilly: resolution on them is really small and terrible, but [00:40:00] at the time it was, uh, amazing. Um, but the problem was they had very low profit margins on these things because they had a lot of competition.

In the film business, they had very high profit margins, but it was declining. So they had declining main business, doing very well in another business, but they couldn’t keep their margins. By 2007, they’d fallen from number one to number four in digital camera sales with a 9.6% share. By 2010, they dropped down to a 7% share and were in seventh place behind Cannon, Sony, Nickon, and others.

Tony Kynaston: They’re the ones I re, I remember, so perhaps I was a bit late to wearing digital cameras, but I remember having a Panasonic and a, a Nick on, I think over the years.

Cameron Reilly: Hmm. So all of those Asian companies came out and just, uh, them, so they went bankrupt [00:41:00] and had to reinvent themselves in 2012. But then. On July 28th, 2020, the Trump administration announced that it planned to give Kodak a $765 million loan from the DFC, the Development Finance Corporation part of, uh, a Washington thing for manufacturing ingredients used in pharmaceuticals to rebuild the National stockpile depleted by the COVID pandemic and to reduce dependency on foreign factories.

Tony Kynaston: Why was Kodak involved in that?

Cameron Reilly: Well, he did a deal because they obviously had expertise in chemicals, so it was like, Hey, you guys dunno what to do with yourselves. You got experts in particularly light sensitive chemicals. We need, we need, uh, somebody to build pharmaceutical precursors. Uh, if we give you a 600 and a $765 million loan, can you, you know, [00:42:00] build up a division of the Yeah, sure.

Tony Kynaston: Yeah.

Cameron Reilly: The story’s even better. So within two days of this announcement, the stock price had gone up by 2189%.

Tony Kynaston: and who owned the stock? Pre and post.

Cameron Reilly: It went from $2 15 to $60 in two days.

Uh, the New York Times reported that one day before the White House announced the loan, Kodak, CEO, Jim Conza was given 1.75 million stock options,

Tony Kynaston: So

Cameron Reilly: of

Tony Kynaston: 60 bucks.

Cameron Reilly: no at $2 15

Tony Kynaston: Right. But yeah. Okay.

Cameron Reilly: strike price.

Tony Kynaston: Yeah.

Cameron Reilly: That was two days before, no one day before the announcement. He was given 1.75 million stock options,

Tony Kynaston: Lucky him. Lucky Mr. [00:43:00] Costanza.

Cameron Reilly: some of which he was able to execute immediately.

There was a, like a vesting period.

Tony Kynaston: Hmm.

Cameron Reilly: Couldn’t execute all of them, but he could execute some of them. Uh, this news blew up. Elizabeth Warren and people like that discovered this and went nuts over it. The funding was put on hold by the Securities and Exchange Commission. There was, uh, uh, allegations of insider trading by Kodak executives.

Big investigation happened. Conza and other executives had to testify in June of 2021. As part of SEC investigations. There was a class action lawsuit from Kodak. Investors

Tony Kynaston: Why? Why? Because they share price has gone from two bucks, 50 to 60 bucks.

Cameron Reilly: Didn’t stay at 60 bucks, Tony, it fell.

Tony Kynaston: Uh,

Cameron Reilly: Down to $7 where it’s more or less stayed, but still from $2 to $7. Not bad. It’s about $7 [00:44:00] 83 at the moment. Uh, well it was when I did my analysis, but, uh, all of the executives got off scot-free. Tony, uh, class action was dismissed. Um, uh, all the executives walked away from it unscathed, but two guys did not.

A guy called Andrew Stiles and his cousin both pled guilty to insider trading, but neither of them worked for Kodak. Andrew Stiles was the vice president at Flower, P-H-L-O-W, a Richmond, Virginia based medicine supply chain company that wa