In this episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle chat about:
- Warren Buffett Buys Japan
- Bill’s Big Bet $QRTEA v $ZM
- RuBisCO – Suboptimal Environments That Remain Unchanged
- The Buffett Indicator
- Theil’s 10x Technology Rule
- Passing On Seth Klarman
- Internet Tax
- Investors Should Read John Malone’s Liberty Letters
- Does Value Investing Still Make Sense?
- Montier’s Investing In The Age Of Financial Repression
- YouTube’s Push For Ads
You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:
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Full Transcript
Tobias: Hello, folks. It’s 10:30 AM on the West Coast, 1:30 PM on the East Coast. If you’d like to listen to this live because I get an email every day asking me, “How do we listen to it live?” You go to The Acquirers Podcast YouTube channel. You’ll be able to sign up, you can subscribe or something like that, and then ask for the notification. As soon as we go live, you get an email, you can click the link and you can hear it. How’s everybody doing?
Bill: Are we live?
Tobias: Yeah, we’re live.
Bill: [crosstalk]
Tobias: Where’s everyone calling in from, Toby? That’s what I want to know.
Bill: Yeah, that is the important stuff.
Tobias: We got Scott Jackson Bonjour from Dublin. Chai Town. [crosstalk] Toronto. Colombia. Indonesia.
Bill: [crosstalk] –up for too long. There we go. I’ve been up for too long.
Tobias: Portland.
Bill: I have already taken out a stand-up paddleboard in the ocean, so that was pretty cool.
Jake: Nice.
Bill: Nice little morning.
Tobias: Maimi, Sweden, Scotland, Cincinnati.
Bill: If my morning didn’t start at 2:00 AM, I’d be a little happier.
Jake: Yeah, Florida lifestyle.
Bill: Yeah. Well, kids.
Jake: Maybe [crosstalk] get this party started down there, waking up early.
Bill: Yeah. My Montier shirt. Shout out to James.
Tobias: One of the 10. Two of 10. James Montier, two of the 10. [laughs]
Bill: Dude, not last year or not after last week when I said that he’d been wrong for too long, he’s no longer listening. I’m sorry, James, come back. Should I start this thing?
Tobias: Let’s do it.
Bill: Welcome to Value After Hours. I’m Bill Brewster with my cohosts, Jake Taylor and Toby Carlisle. Jake, what are you going to be talking about today?
Jake: I’m going to be talking about the most abundant enzyme on earth and what that might teach us about business.
Tobias: Enzyme?
Bill: Yes
Jake: What are you going to be talking about, Toby?
Tobias: So, I’ve got two. Buffett has done this magnificent little deal in Japan where he’s borrowing. The rate on his borrow is less than the dividends that he’s getting out of these Japanese big trading conglomerates that he’s bought into. And I want to talk a little bit about market-level valuation. Tweeted out the Buffett indicator yesterday made everybody mad. So, let’s talk about it.
Jake: Bill, what about you, what you got?
[chuckles]Jake: Bill’s frozen.
[laughter]Jake: Bill got really sleepy.
Tobias: Bill woke up at 2:00 AM.
Bill: I’m in the Matrix.
Tobias: There we go. Now he’s back.
Bill: I went into the Matrix there for a second.
Tobias: What’s your topic, Bill?
***
Bill’s Big Bet $QRTEA v $ZM
Bill: I’ll probably talk about this bet that I’m getting my butt kicked in already.
[laughter]Tobias: You never go value.
Jake: Yeah.
Bill: Yeah. Two and a half year bet, and I’ve already lost.
Tobias: Would you want to start there? That’s pretty fun.
Bill: Sure.
Jake: You’re already down triple digits. [laughs]
Bill: Yeah, pretty much. I think Qurate’s a reasonably good idea.
Tobias: Let’s talk about what the bet. What’s the bet?
Jake: Yeah, layout the bet.
Bill: Can I get there? Geez. Just because you guys tell a story differently than I do, doesn’t mean that I can’t get [crosstalk] going.
Tobias: You got to start at the start, Bill. That’s how stories go.
Bill: Dude, that’s the fucking start, man. I’ve been researching stuff. I’ve thought that I think Qurate’s a pretty good idea. I followed the company for a while. I think there’s a financial transaction that’s interesting. I might be the idiot at the table. I was talking to my mother’s friends who said that they do not believe in the stock market and that they– [crosstalk]
Tobias: It’s real.
Jake: [crosstalk] -like Santa Claus.
Bill: Yeah, they just don’t think that the incentives are aligned and they don’t think anybody’s out there looking out for them.
Tobias: That part is true.
Bill: So, they don’t ever want to touch any stocks. And then, the wife sort of piped up and she was like, “Oh, by the way, my husband has bought Zoom, what do you think of that?” And I said, “Well, Zoom is sort of hard for me to get my head around. What do you like about it?” And it was literally everybody’s on Zoom right now, so we bought the stock. I’m still sort of old school and thought that you needed to do a little bit more research than that.
Jake: It just goes up, man, who cares?
Tobias: [chuckles] That’s where you’ve gone wrong there, Bill. I’ve identified the problem.
Bill: Yeah, [chuckles] So, that’s obviously– I’ve been studying the wrong thing because I should have just been buying things like Teladoc and all that. I’m in an interesting part, because I actually care about this game a little bit, but I’m getting my ass kicked by all my wife’s friends right now, and they’re pitching her e-commerce, e-learning companies and stuff like that, and they’re buying and it’s going up. So, that’s working nicely for them for now.
So anyway, I had just put out a tweet. And I was like, “Look, I think people are chasing heat right now. And on average, that’s not going to end up well.” And my man, Austin Lieberman, who is long Zoom for– he was really early on it. He’s identified himself as somebody that picks like great companies and sticks with them. He’s not into bailing before the growth story is over. I think he maybe read something different into my tweet than I actually said, which can happen sometimes on Twitter, lo and behold, we’re not exactly speaking the same language sometimes. So, I was like, “Fuck it. Put your chips down. I’ll take Qurate, you take Zoom. We’ll see,” two and a half years. Fast forward two days and I’m trailing by like 55%.
[laughter]Jake: Well, Zoom did report a monster quarter a day after you placed the bet?
Bill: I mean it’s up 40% today which is fine, whatever but–
Tobias: It’s funny because you’ve set the terms of the bet. You’ve said two and a half years and you’ve done that on purpose because Qurate is going to get two Christmas shopping sessions through that.
Bill: That’s right. It’s a seasonal business. You… in two shopping schedules. I’m not going to do two Januarys. That’s a sucker’s bet.
Tobias: Austin, he thinks that he’s going to win the bit too, because he’s like, “Well, I’ve got it just before they’re going to have this blowout earnings and the stock is going to explode up.” He’s got the first part of the– at the first furlong, it’s Zoom by a length and we need to see over the rest of the race if Qurate can catch up.
Jake: Qurate hasn’t left the paddock yet.
[laughter]Bill: I said on Twitter– I don’t know now I’m getting like bombarded with Zoom tweets because of this thing. And look, if you’re a listener, please log on if you follow me on Twitter, there’s a link, all the proceeds are going to benefit a charity. So, please go on my page and if you can afford to donate 10 bucks or whatever, it would go a long way. So, I said to him, I was like– Look, it’s basically like I’m playing against Steph Curry and he just pulled up from half-court and beat me. All right, you got to tip your cap, you lost that game, but it’s the best of seven series. So, we’ve got a long way to go. But it is super funny to be this down this quickly. It’s like, “Oh, fuck.”
Jake: Yeah, talking about like venial sins being punished swiftly. [laughs]
Tobias: Yeah.
Bill: That’s right. I mean 50% in value land, when’s the last time any stock has gone up 50% in value land?. It’s been a minute. So, these Momo things, they can rip on you.
Jake: I [crosstalk] crunch some numbers on it and said… if it does this quarter for three more quarters basically, which is probably not unreasonable given recurring revenue, I don’t know but price to sales will have gone from 115 to 35 and the P/E will have gone from 2000 to 88.
Tobias: That used to be expensive.
Jake: I was going to say like– [laughs] Remember when 35 price to sales was– you’d kind of be like, “Ooh, boy, you guys really like this, huh?”
Tobias: The only thing that could make them go down is if they’re trying to raise some money.
Bill: Yeah. Look, to give them some props here. Their cash flow from operations increase this– the first six months ended July 31, 2019, $53 million in cash flow from operations. This quarter, $660 million. And that’s growth. So, they did it. So, they’ve got to keep doing it. We’ll see. I don’t know anymore. I have no fucking clue. I don’t know why anyone would care about my opinion on any of these companies. I’ve been dead wrong. Tesla is ripping. They’re issuing shares and their stock is going up like it should and then it’s selling off like it shouldn’t. It makes no sense to me. I don’t know what I’m doing anymore. I’m basically a dinosaur playing a new person’s game and I have an ugly shirt to boot, which I actually don’t think is ugly.
Tobias: Some of those are self-inflicted.
Bill: What, the shirt?
[laughter]Jake: Yeah, the shirt’s an unforced error.
Bill: Yeah. So, I don’t know.
Tobias: I thought Tesla was down in this market. Someone says–
Bill: When I looked at it this morning, it was up. And I thought like, “Oh, it should be.” Dude, if Musk could issue shares up here and then buy them lower, that’s some Henry Singleton type stuff. I think that’s a good move for him. I know that some people are going to think they’re getting diluted. I think they’re delusional.
Tobias: Not much.
Bill: But that’s a whole different issue.
Tobias: It’s $5 billion on like a $400 billion market cap, isn’t it?
Bill: Still money. I would go bigger.
Tobias: Yeah. Well, you do what you can do.
Bill: [crosstalk] –$20 billion or something like that.
Jake: The water on that balance sheet, if you can dilute there, you’re doing the Lord’s work.
[laughter]Jake: If you’re Elon.
Bill: Dude, it’s not that long ago it was $100 billion company. It goes down to $80 billion, you buy $5 billion in, and that’s actually real money.
Jake: It was like a $30 billion company. Not that long ago.
Bill: Yes, my whole point is like, I totally get it. Oh, dang. What’s up, Trevor Scott? Look… on the big screen. He’s got us on a huge screen. That’s dope. Sorry about the shirt, man. Anyway, I like what Musk is doing here. It makes total sense to me. I would go bigger if I were him.
Jake: I watched that Neuralink presentation just because I’m curious, morbid fascination. But think about that as a recruiting tool and how little that cost to put together. There’s probably incredible ROI on that for just talent finding. He’s doing some things that are pretty smart. Even if some of the claims–
Bill: He’s doing a lot of stuff that’s smart.
Jake: –seem a little bit that’s a little aggressive. Well, we’re going to figure out consciousness finally. Great.
Tobias: He’s a good entrepreneur.
Bill: I don’t know what’s the difference between genius and promotion, it’s pretty thin sometimes.
Jake: This is a perfect time for him to wear– lots of cheap money floating around, low skepticism, pretty much like fake everything is not a problem. We don’t care about the truth anymore. This is a great time to be Elon Musk.
Bill: Well, I think something that’s interesting that was pointed out actually by Trevor Scott earlier today that I read, his point was like, if rates are going to be lower for a long time, these really long duration assets should be quite a bit higher. We’ve said that before. I actually also think, and this is like really tempting the gods here, but I actually think that these really levered businesses should be also worth more, not just because they’re– Well, you laugh. But you refi them down. And you can bring your cost down. You’re almost an idiot if you’re not using leverage at this point. And I mean that’s a–
Tobias: You’re incentivized to do it. They’re telling you to do it. Fed’s telling you to do it.
Bill: Massively.
Jake: January 2008 is calling and they want to say how you have– [crosstalk]
Bill: Yeah, but this is different.
Jake: –easy it is to roll that debt over.
Bill: But this is totally different. You’re talking about a crisis in the middle of the banking system, that’s not this. Secondly, you know the government’s coming to get you. We just saw it in March, they’re not going to let you fail. I don’t understand how you don’t issue super long duration debt. And by the way, if rates go up, you can [unintelligible [00:13:21] at pennies on the dollar because that shit is going to get traded down like crazy.
Tobias: It’s going to get inflated away too.
Bill: And you don’t have any near term maturities. You just need to manage your liquidity in the interim.
Tobias: Who’s buying it? Who’s on the other side of that trade?
Bill: I have no idea, man, I’ve been saying this for years. That said, when everything was crashing in March, and I thought debt might own all the equity, it made sense to me. But, yeah, I’ve said that for a while, like who is buying this paper? I don’t know.
Tobias: Well, it’s got a little yield, I guess.
Jake: What about the argument against that though, with a very tech-led deflation that leads to this debt being completely unserviceable?
Tobias: Tech-led deflation?
Jake: Yeah. You’ve got to read the price of tomorrow.
Tobias: Have you seen the stock market, Sir?
Bill: So, what does the tech-led deflation do? So, rates go negative, you just refi your debt and get paid for having it. You’re never going to pay the debt back is the point. You just keep refi-ing it out. It’s offensive to even articulate but that is what’s going on in the game right now. And I don’t see how people aren’t playing it.
Tobias: It’s funny that the same word is used to describe two different things. This is the deflation– your TV gets faster and better and higher definition and cheaper at the same time. Somehow, that’s deflation. At the same time, assets going down, that’s also deflation. To my mind, those are two different things, but they both seem to count towards the Fed gets to use both of those for the hedonic adjustments and so I don’t get it.
Bill: Look, I haven’t looked into all the covenants on these things. I’m sure they’re like cross-defaulted and everything like that. The Qurate equity that I’m talking about on a pro forma basis is probably going to trade at a market cap somewhere around $2.5 billion. I think that they have a legit shot at printing $400 to $600 million of free cash flow to common equity. I understand people are concerned it’s a melting ice cube. It’s very possible that they really have to change their business. I get that. Their average customer is 50 years old. The average life of the customer is 30 years. The average rabid customer is 17%, account for 78% of the sale. She orders through $3500 of stuff a year. I don’t see a 50-year-old woman dying tomorrow. Expected life of that woman consumption wise is probably 22 years. She’s got cohorts that are continuing to come in over and over again– or not, she do– but they do. The implied life of the equity, you’re looking in my opinion at $400 to $600 million normalized on a $2.5 billion market cap. The debt that they issued is out to 2068.
There is a disconnect between what the debt market is saying. Now, yes, it yields 6.25% and it’s secured. I guess there’s a 2067 note that yields– I don’t know it looks like 6375 is the coupon and it’s got a first lien on some shit. But that is long paper. If that is money good, the equity is hard to lose money on. Now–
Jake: I thought debt was supposed to be smart money.
Bill: I have no idea. I don’t think that you can necessarily like look at where debts trading and say, “Oh, well, then the equity safe. I get that debt is not totally thoughtful, but there’s just a disconnect there. And I think that is a lot of places. So, if you’re a CFO, I don’t see how you’re not pushing the shit out of the debt market.
Tobias: That’s right.
Bill: [crosstalk] uncomfortable.
Jake: It’s right [crosstalk] individual but in an aggregate, it’s problematic.
Tobias: That’s right. Should we move on?
Bill: Yeah.
Tobias: You want to do Buffett and Japan?
Bill: Oh, and by the way, all of the incentives are to inflate the debt away anyway because no one can actually pay it back.
Tobias: That’s right. That’s why we are where we are. That’s exactly wh we are where we are.
Bill: Do you know who could really benefit?
Tobias: Qurate.
Bill: No, not them. But if the dollar goes down, AB InBev is a massive beneficiary because they have a lot of debt and dollars and a lot of revenues in foreign currency.
Tobias: Works the other way too.
Jake: By the way, I was going to– I think if my calculations are correct, this is our 40th episode.
Tobias: Oh, really?
Bill: Yay.
Jake: So, congrats, boys.
Tobias: 40%. We made it!
Jake: We definitely made it over anyone would have thought.
Tobias: The big 40.
Bill: My over was three. I’ll do a couple of these and we’ll see if anybody likes it. [laughs]
Tobias: Still here.
Bill: Still waiting for that money from Google though, send it over and stop loading our stuff with ads.
Tobias: You can also listen to it on the audio. There’s no ads on the audio.
Bill: True story.
Tobias: Do you want to do Buffett? Save the veggies for last, keep everybody around? [laughs]
Bill: Yeah, indeed.
***
Warren Buffett Buys Japan
Tobias: So, Buffett’s bought five of these Japanese trading conglomerates. The yield on them is between almost 6% and the lowest is at 3.25%. And then, Shai Dardashti put this together in a tweet, shout out to Shai. He said, “Berkshire’s borrowed all this money in yen.” And all these notes are due way into the future. He’s borrowing between 0.17% and 1.1%. So, his most expensive note costs much less than the lowest yielding dividend. And it’s non-recourse debt, so it can’t be called, it’s not like a margin loan where the stock moves against you and you get it yanked. He can hold it out to until it matures. But Postmarket had found this really great tweet or found this really great– Buffett was at the University of Denver, and he advised students to borrow at 1% to buy AT&T, which was yielding 6%. This is Malone. Apologies.
Jake: Yes, that’s Malone. Yeah
Tobias: I think Everybody knows that Buffett is a great investor, but he’s also a great deal maker. And I think that Chris Bloomstran highlighted that. And here it is, once again, he really is just one of the best deal makers that’s ever walked the earth as well as being a very, very good– the best investor that’s walk the earth. Got to take your hat off to old fella, he’s still doing it.
Bill: Yeah, the problem is he doesn’t lever up to buy these businesses. Stop messing around with this stupid ass dividend carry trade and go out and buy some real stuff and use some leverage.
Tobias: Hasn’t he just done that? Isnt that what he’s done?
Bill: [crosstalk]
Jake: Send your hate mail to Brewster– [crosstalk]
Bill: I love him.
Jake: But isn’t that what he’s just done? What am I missing?
Bill: I’m just saying. No, it’s $6 billion. Go out and get some then if you’re going to do this.
Tobias: It’s 1.5% of market cap.
Bill: I guess. Yeah.
Jake: That’s a great move. How long before this pays itself off?
Tobias: Yeah, that’s good question. I don’t know exactly, 20 years or something like that, probably.
Jake: Probably something like that. But in the meantime, there’s a good possibility of them raising dividends. If my understanding of shareholder appreciation or respect in Japan, which has been I think on an upward swing, there’s other ways to win other than just the carry trade of borrowing the yen and cash at the divi.
Tobias: I don’t know if it’s a carry trade as so much as he’s just financing those acquisitions but he gets the carry trade as part of it and he also gets– this is according to some of the articles that I read. He gets an entree into– he can do other deals with these guys. And he can take his holdings on fully maxed out at this level. He can take them up to about 9.5% before he triggers some substantial holder issue. I think Bill’s in Matrix again. There you go. He’s back.
Bill: I’m deep in the Matrix if you can hear me.
Tobias: [laughs]
Tobias: Where are you recording from? Bill, you’re on the moon and now you’re back. [laughs]
Jake: Mars.
Bill: It’s not good. I don’t know why it’s so bad. Anyway, I’m not trying to sound mean to Buffett. I love Buffett. I’m just saying I don’t know. There’s weird stuff going on out there, that’s all I know.
Jake: You’re not going to give him the 90th birthday break?
Tobias: Oh yeah.
Bill: I love him. I’m just a schmuck. I’m not trying to really go at him, but I do think, come on, man. If you’re going to go out and get something, go out and get something. I don’t know that like issuing yen debt to do a bunch of dividend-yielding Japanese companies is the most exciting thing I’ve ever heard, but I respect it. It’s an OG move for sure.
Tobias: I think that your advice to both Musk and to Buffett is the same, just go bigger.
Jake: Yeah. Stop pussyfooting around. [chuckles]
Bill: Well, Buffett– there’s so much money out there right now, and you look at some of these shitty companies that are issuing debt and it’s just free and it’s there for him. I understand why you don’t want to be reliant on the kindness of strangers, but I just don’t think– right now there’s… the debt is so cheap, like I don’t know. Yeah… in some equity.
company can take a little bit of leverage. It’s okay.
***
What Is The Buffett Indicator Telling Us?
Tobias: We’re getting your messages from the Moon, mate. You’re coming through spottily. Let’s move on to the other thing. The Buffett indicator, which is total market capitalization to gross national product, that’s significant because gross domestic product is all of the stuff, all the money that’s made within the four corners of the US. Gross national product is all the money that’s made globally by residents of the US, so that’s why it’s a more appropriate measure to compare it to total market capitalization.
In practical terms, there’s nothing much different. So, the current total market capitalization, I think that the site that I tweeted out, I think it was GuruFocus. They use the Wilshire 5000, which is not 5000 stocks anymore. It might have been 5000 stocks in 2000. The significant thing, I haven’t–
Jake: Ran out of inventory.
Tobias: They have, yeah. Sarbanes-Oxley stuffed them up. I don’t really follow this stuff that closely. I just had a look at it yesterday, because I saw somebody tweet something about it and whenever I see someone tweet something, I immediately go and check to make sure that the data is correct. Data are correct. Data is correct, sounds better. So, I checked it and they’re absolutely right. So, the total market capitalization is like 185% of gross national product. In 2000, we topped out at 140%. So, we’re materially over that.
Everybody’s been sending out the single-year P/E. The single single-year P/E, it’s off the Richter scale at the moment because we’ve had such a big knock. I don’t worry about those necessarily at all. I just ignore them because single year is kind of meaningless. But I was surprised to see all these cyclical measures are now very, very stretched. CAPE’s at 32 only exceeded by 29 late 1990s, 2000, and 2018 when it got to 33. Tobin’s Q is about 140% over its long run main. So, Tobin’s Q is not quite as stretched as the others.
Jake: That’s because book value has lagged a lot of–
Tobias: That could be right. Yeah. But also it’s not as stretched but it’s still very, very stretched throughout very many– all the times that are more expensive than the now recently and then those other two examples 29, 2000, which I hesitate to raise because it sounds like I’m being silly about those things.
But it’s expensive. I don’t know what to say, every long run measure– doesn’t mean anything in the short term, value is a terrible timing tool. It’s just interesting. That’s the backdrop. You’ve just got to be careful. There are some really expensive things that you have to be in retrospect in five years’ time, you might look back and think, “That was a dumb thing to do. Why did I swing at that level?”
Bill: Sounds like you call on top.
Tobias: I’m not calling it top. I’m just saying it’s expensive.
Bill: I’m just kidding. I’m over here in the Matrix. I can barely hear anything.
[laughter]Tobias: As for the top, let’s talk about that. Let’s talk about how silly the markets got. So, you don’t think we’re in the [unintelligible [00:26:48] top? I think Bill’s too far in the Matrix. Can you hear him?
Bill: Oh, no. I don’t think we’re even close. I think that there’s so much skepticism out there that this is not sustainable, that that’s not how craziness ends. I think it’s just getting wound up. I really do. I’m going to– [crosstalk]
Jake: [crosstalk]
Bill: One or two? Apple at $5 or $6 trillion is where I would start to say, “All right, this gets a little nutty.”
Jake: How many funds are they selling in that $5 or $6 trillion scenario?
Bill: Doesn’t matter. You talk about–
Jake: Doesn’t matter.
Bill: Well, no. What you’re talking about is all of the service revenue that they’re generating from skimming everything from the App Store and all that stuff. What’s the tenure at? 66 basis points, 70 basis points, something like that? You just say, okay, well, Apple’s 1% free cash flow yield, it’s growing 7%. I’m going to flip it at the same multiple down the road, that’s an 8% IRR, that 7% versus what I could get in the tenure and you can justify that. That’s where I think we’re going. I’m almost convinced of it.
Tobias: I have no idea where we’re going.
Bill: I haven’t bet it. I don’t put my own money on that. Despite my bashing of Buffett, it’s my biggest position. I’m not really actually back bashing him. I really do like him and I have mad respect for what he does. But, yeah, I think the world’s about to get a lot crazier than it is.
Tobias: Yeah, I don’t know what’s going to happen. The only thing I say is that I think that we’re kind of in the later stages– if we’re looking at previous booms, the basis that I would say, we’re in the later stages– Valuation, we’re kind of around the 2000 level. Spread is around the 2000 level between the most overvalued and the most undervalued. We’re also seeing this thing that’s very unusual. In the late 1990s, I don’t know how long it lasted. It could have been 18 months, something like that. You get this upside volatility.
So, normally what we associate volatility with when the market crashes, that’s when all the vol spikes. But when you get these speculative manias, you get upside volatility because folks are buying so much because call options become– that’s the smartest thing to do. You just buy calls because you get the real leverage in the calls, and retail participation is now here with Robinhood. I think Robinhood’s now got the most accounts out of every brokerage, is that right? Is that a true fact? I read it on the internet.
Bill: I don’t know.
Jake: No.
Tobias: You guys don’t know? Let’s say it is, I think they’ve got the most accounts, maybe I’m wrong.
Jake: $10 per account.
Tobias: Maybe, but they’ve still got the most. Retail participation is the point. Remember all the day traders in the late 1990s and then they’re buying calls. A lot of the trades are in calls. So that’s where all the volatility comes from.
Bill: Kicking the crap out of the professionals, Klarman’s looking at redemptions I heard.
Tobias: Yeah, that’s another topic we should talk about.
Bill: I know it’s nutty when I say that we’re just getting started, but it goes to Cliff Asness thing. I mean, first of all, these companies are really, really, really impressive.
Anyway, I think these companies are impressive. I think that they’re the infrastructure, the internet of the future. I think people can get carried away with it. But once you think that people can get nuts, I don’t see why there’s a limitation on how nuts they can get. And I’m not sure that they’re nuts yet.
Jake: I take a little offense to using actual numbers to try to justify Apple at $5 trillion. Just say people will just bid it up there. Don’t tell me it’s because some logical– [crosstalk]
Bill: But it is. That’s what people are going to say.
Tobias: What’s the reason for all this loopiness?
Bill: [crosstalk] -into 1%, free cash, it’s a $5 trillion company. Rates are a lot of it, I think, and the lack of growth makes growth more scarce and things that are scarce by nature are valuable.
Tobias: That’s true. What’s it worth?
Bill: I have no idea, dude. That’s why I don’t play that game.
Tobias: But we’re already in the loopy part of the game. We’re just trying to work out how loopy it can get, and nobody knows the answer to that. You’re saying we’re innings two of loopiness and I’m saying we’re in like innings eight or nine of loopiness.
Bill: I think it is hard for me to intellectually understand how a company can add $40 billion in value on an earnings report. That’s difficult for me to understand. But I acknowledge that there’s an argument that might be able to be made to justify. That’s what I’m going to say. Until I can’t even articulate the argument, then I think that we’re somewhat within the bounds of rationality. And right now, I can articulate the arguments. I bet against them. I laid $2000 against it. So, I’m not like saying, “Oh, it’s definitely going to continue.” I’m not prepared to say that this is stopping anytime soon.
Jake: So, is there anything that’s comparable to– in The Big Short, Burry knew that there was a certain vintage that was coming due within a certain time period that was going to be very, very problematic for all those mortgage-backed securities. It was baked into the structure of those. So, he had a catalyst that he was waiting for. Do we have anything like that right now that we could point to say like, well, here’s why this might derail it other than an election or further social unrest or COVID re-spiking in the fall, or I don’t know. What do you guys have on that?
Tobias: Yeah, that’d be my list, all those things.
Bill: I got nothing. I have no idea. I don’t know any of this stuff. Tesla popping, that would be step one.
Tobias: When do you think that’s going to happen? We’re going to wait for a while– when you say pop, you mean pop up or pop down?
Jake: No, he means down.
Bill: Yeah. But I don’t even know why– I don’t even have standing to comment on that stock, I have been wrong for $300 a share. So, why do I even deserve to talk about it?
Tobias: I’ve been wrong since $300 of share.
Bill: [crosstalk]
Tobias: I’ve been wrong since 90% ago.
Jake: Pre-5X split two.
[laughter]Bill: Well, that’s what I’m saying. A $100 a share or something, I was probably saying it was overvalued. So, I mean, it’s 4Xed on me. Who am I? I’m just an idiot. I don’t know how to play this game, so I just avoid the game. But I know if I played it, I’d be the dumb money.
Tobias: Let’s eat some veggies.
***
RuBisCO – Suboptimal Environments That Remain Unchanged
Jake: All right, veggies time. Do you guys have any guesses as to what the most abundant enzyme on planet Earth is?
Tobias: Enzyme? That’s tough. No idea. What’s an enzyme?
Jake: Well, an enzyme is a– I think it’s a type of protein that–
Tobias: It’s a building block for a protein, I think.
Jake: Well, it actually will like cut things or speed up a– it’s like a catalyst that will speed up a reaction. So, this particular enzyme is called RuBisCO, I think is how it’s pronounced. And that’s like mashing together of a lot of really big words that I’m not even going to embarrass myself by pronouncing. When you read the back of the package of some really prepared boxed food and it’s all these crazy chemicals, that’s what it sounds like.
Tobias: Is it yeast?
Jake: [crosstalk] No, it’s ribulose bisphosphate carboxylase, something like that.
Tobias: No idea. I thought that was a stock.
[laughter]Tobias: [crosstalk] –RuBisCO.
Jake: Yeah. This thing drives photosynthesis by catalyzing the capture of carbon dioxide out of the atmosphere. So, what they call like carbon capture, it’s plants are what use this enzyme. If you stop for a second and think, this has always blown my mind but if you look at a tree or any plant, where did it come from? Where did the actual material to create this 300-foot tall tree come from? And the answer is actually thin air. Carbon out of the air was captured by this plant to build more of itself.
Tobias: That’s how they do it, then it’s suck it up for the soil.
Jake: No, it’s not the soil. It’s the air for most of it.
Tobias: These are good veggies.
Jake: Yeah, so RuBisCO, what’s interesting about it is that it evolved actually a very, very long time ago before the Earth’s atmosphere was as oxygenated as it is now. It was mostly carbon dioxide. But today, what happens is that RuBisCO can mistake oxygen for CO2 and capture it. And what that’ll do is it’ll produce these harmful byproducts in the plant sometimes. And it’s also very wasteful, relatively speaking, like metabolically. Photosynthesis is actually about 25% less efficient than it could be if it wasn’t based on RuBisCO. And it’s called photorespiration where sugar is actually consumed within the plant instead of produced by photosynthesis, anyway.
RuBisCO is so interlocked in the plants, this very delicate biochemistry that it can’t be replaced. And instead, the plants have evolved all this complex patchwork of workarounds to still use this enzyme and maintain how it evolved to work. So, the question really is what else in our world is so entwined in the system, but it’s actually very suboptimal, but we can’t root it out. Bill, please.
Bill: Can I go with the Fed, please?
[chuckles]Jake: Judges? Yes, we will accept that answer.
Tobias: Yeah, I need to keep thinking. Sorry, I’m still thinking about the RuBisCO.
Jake: You’re thinking about eating biscuits right now.
[laughter]Jake: So, I have a couple things that might be interesting on that. I’m going to go from least interesting to me most interesting. I think that I’ve read somewhere that the HTTP protocol of the internet is not necessarily the best way that things could be done, but it was the original protocol. So, sort of embedded in a system that we can’t really root it out at the moment.
Tobias: The QWERTY keyboard.
Jake: QWERTY keyboard is another great example.
Bill: Ooh, that is a good one.
Tobias: Because it’s purposefully designed to slow you down, so you don’t get the typewriter keys mixed up. They get them overlapping, but– [crosstalk]
Bill: Dude, I’ll tell you what it messes up, is autocorrect. I have never said ducking in my entire life. Okay, and I’ve never said congs. I used longs. Why does Apple not understand that it’s fucking and longs?
[laughter]Jake: Usually, it’s the same– [crosstalk]
Tobias: I text that a lot too! [laughs]
Bill: Yeah, but the QWERTY keyboard ruins it. Apparently, it makes–
Tobias: Can’t you teach it?
Bill: – the machine learning too difficult because the keys are too close. So, I get ducking congs in all my stuff which people think I’m like in some fiction movie.
Jake: [chuckles] To piggyback on Bill’s, I would say, tinfoil hat alert, but potentially Keynesianism, especially the way that we practice it, might be one of those things. Maybe even the two-party system is something that we’re stuck with that we can’t seem to evolve away from.
And then, the last one, which I think is the most interesting actually, is Excel. And when I say that– I actually I have huge respect for Excel. It can do so many things and it’s actually as more general modeling software. It’s incredibly robust and useful. I think it’s been now used in so many different ways suboptimally, potentially, but yet it’s part of the system. And I could tell you from personal experience, that you’d be shocked at how much of critical infrastructure is run on Excel, and lives and functions because Excel is working.
Tobias: I’ve seen discussions on Twitter about– there are lots of analysts who maintain their positions at funds because they were the one who built the super complicated Excel spreadsheet for some big holding, and nobody else can configure the spreadsheet out. They’re just not going anywhere, because they’re the only one who knows how to work that spreadsheet.
Bill: It turns out, they hardcoded the one cell to making it all working your way.
Tobias: That’s how you do it.
[laughter]Bill: I can’t figure this thing out.
Jake: It’s a RuBisCO of the software world. This early enzyme that works, but then when the environment has changed, it hasn’t really, really kept up necessarily. And it got me thinking about, are those type of situations, what you might call like complexity attractors, or something like that? Because imagine all the built-in– you have this real thin sort of base, and then you build all this Rube Goldberg type of machinery on top of it. There’s a lot of complexity and fragility that can be brought in by not evolving the entire system. So, if you get some part of it that’s stuck, maybe that becomes an attractor for complexity.
Tobias: But there’s some businesses out there that are like that. I think HEICO is explicitly hunting for that kind of thing where it’s not the most important part of the ecosystem, it’s a small part of the ecosystem but just nothing else functions without it. It doesn’t cost you much or it’s going to overpay for it because it’s just too much of a pain to go and figure out how to do it yourself. That’s what they’re hunting for. So, that might be the RuBisCO of– maybe as an investor, you should be hunting for RuBisCOs.
Jake: Quite possibly, yes.
Bill: Something that you just said reminded me, Jake, of this tweet that is– I’m pretty sure it’s a guy, might be a girl, but the fool on Twitter said that, he’s like, “One of the things that bothers me is when people’s answer is this solution must win because it’s the best.” That is not true because there’s a lot of instances that existing infrastructure while suboptimal precludes the optimal answer. It was like two sentences ago that you said, and I was like, “That really reminds me of that statement.”
Tobias: The reason many things survive–
***
Theil’s 10x Technology Rule
Jake: I like what Peter Thiel said about that. You have to be 10X better to displace whatever the existing is because that’s the only thing– it has to be that sort of step change in the evolution. It can’t just be iterative, little bit better because that will not be enough to trigger a full shake-up of the ecosystem.
Bill: Yes. So, bringing it all the way back to the bet that I’m getting my ass kicked in. I think a healthier reaction to something like Zoom for someone like me that’s getting his ass kicked in a bet this quickly is to just get curious about why. Because if you really do have to be 10X better, why are they the ones that are capturing so much of this. Because to me, the product is kind of garbagey.
Tobias: This is what I was going to say earlier. Sometimes, it’s just one little thing that makes it easy to use and something else. And I would say for Zoom– I think Jake said this to me, so I’m just going to steal it, mate, but I’ll give you attribution for it. It was sending around the link to the meeting, so you just had to click on one thing and we’re all going to be in the same room rather than kind of figuring out how we’re all going to conference. But you would think that that’s pretty easy to replicate.
Jake: You would think.
Tobias: If you’re in Gmail all the time, which a lot of us are, and I use G Suite to run all of my business as well, it’s simple to meet with someone and you literally click the thing and it pops you straight on. I Google Meet more often–
Jake: I stole that from actually Rory Sutherland when he was talking about how Zoom– instead of everyone wasting 15 minutes because of the lowest person in the tech sort of understanding, not being able to figure out how to get into the goddamn meeting and get it going.
Bill: Like how not to stay out of the Matrix for instance.
Jake: Yeah. So, it ironed out that 15 minutes of lost time where they just click the goddamn link and they can get to work. Which I’m sympathetic– I’m not sure that’s a 10X better idea though, right?
Bill: I don’t know.
Tobias: Well, someone points out that Teams has a single link. I tried to use Teams. I couldn’t get into it. I just couldn’t use the bloody thing, it was too hard. You had to–
Jake: [crosstalk] –you couldn’t get it working?
Tobias: No, I couldn’t get it to work. I had the same thing that I had with like– now that Microsoft has done Skype, so you’ve got to get a brand-new login. And that’s what stopped everybody from using it. It’s just too hard to login. But those guys just– you cannot mess around with a login. You’ve got to make the login super simple. I think that’s Zoom’s problem at the moment too. I’ve got two kids at school, using Zoom for all their meetings every hour on the hour, and they’re too young to figure out how to use it. And the login is a 12-step login, including a CAPTCHA halfway through which makes you want to throw their computer through the window every single time.
Jake: This is Toby’s Vietnam right now.
[laughter]Tobias: For 45 minutes of contact time, it takes like 15 minutes to login and then– Zoom, I’ve come to hate you. Sorry, you don’t work. It’s too clunky.
Bill: Well for kids, which is maybe okay. I’m not sure we need our kids on the internet all the time.
Tobias: Well, you do if you’re trying to get them to go to school in California.
Bill: This is true. This is why I moved to Florida. And so far, so good.
Tobias: Throw your questions in, folks.
Bill: I saw a question about Li Lu, what are my thoughts on buying Facebook and Google? One, my thoughts are, you got to develop your own thoughts when you see people do these things. Two, Facebook and Google are the tax of all internet commerce in my mind, and then you can throw Amazon on the rest. I think that a lot of value guys are finally capitulating and realizing that. So, those are my thoughts.
Jake: So, avoid it then? Is that what you’re saying?
Bill: I don’t know how you get it– I don’t know how you get out of it. This is not investment advice. I think Facebook’s going to go quite a bit higher from here, over– I don’t know what timeframe but I think it’d be pretty hard to lose money in Facebook here [crosstalk] the whole thing erodes under your feet, that’s the how, but I don’t see how it happens.
Tobias: I’ll track FAVM, which is Facebook, Amazon, Apple, Alphabet, Visa, MasterCard, because I think those are the best ones. Facebook and Google are probably the two cheapest of that group, they’re probably the two best bets at the moment, in my humble opinion.
Jake: By the way, shoutout to Peter Atwater, who came up with this new acronym, it’s Tesla, Apple and Zoom and it’s TAZmania.
Tobias: [laughs] That’s good. I like it because it’s a little bit like Andrew Wilkinson, he says, he goes looking for New Zealand. I think the smart thing is that he said New Zealand when he meant Tasmania, because Tasmania is– nobody even knows that it’s there. That’s the safest place in the world, got great wine, got great food, seafood, fully self-reliant. That’s where you want to be.
Bill: Yeah, that’s not bad. I’ll tell you what, if you’re interested in some of these better businesses, the Huber podcast on the Investing Pod– [crosstalk]
Tobias: Investor’s Podcast.
Bill: Yeah, that Huber interview was good.
Tobias: Yeah, I had him on too. He’s good to chat to.
Bill: Yeah, yours was good. You’re a very good interviewer, I’m not even pumping you right now. I think you’re very good.
Tobias: That’s all right, mate. I’m promoting–
Bill: –a little while ago, I was just talking about Saturday’s, it came up.
***
Is It Time To Pass On Seth Klarman?
Tobias: Let’s talk about Seth Klarman, Baupost Group, it’s all over. People are unhappy. He hasn’t performed for the last 18 months. I don’t even know if that’s true.
Bill: [crosstalk]
Tobias: The only letters of Baupost Group that I’ve ever seen are the ones from like the late 1990s, early 2000s, where he’s just being sensible the whole way through, all the world goes mad and then keeps on being sensible out the other side. So, naturally, when the world goes mad, what you want to do is sell that bloke and find somebody who trades a mad world.
Bill: [laughs]
Tobias: You want the bloke, he goes– he puts $6 billion to work right at the top of the market.
Bill: That’s funny. What’s also funny is somebody just trying to troll me by saying Barry Diller is greater than Malone. How about we just say that they’re equally awesome.
Tobias: Diller is great. Game respect game.
Bill: Yeah, that’s right.
Tobias: I think Diller’s been around for a long time. Not as long as Malone. Malone just for longevity at the moment, even though the Diller’s older.
Bill: You know what it is a gangster answer? They asked Diller, they were like, “Have you ever not won in business?” And he thought about it for a second. He was like, “No, I’ve won every time [crosstalk] business.”
Tobias: [laughs]
Bill: I was like, “Oh, that’s so badass.”
Internet Tax
Tobias: I got a question for you, Bill. But what do you mean by tax? I think he means Google, Facebook. What do you mean by internet tax?
Bill: Part of my Qurate thesis actually is that the way– Historically, a department store has functioned as a curation machine and an attention aggregator. So, if you didn’t know what you wanted, you would go to a department store. The problem now is if you’re on the internet, you’re just one of an infinite number of options with no barriers to entry. So, if you want to get noticed, you have to spend money on advertising on Facebook or Google. I guess you could do some sort of stuff on Twitter. But those are like the real drivers of brand awareness. One of the reasons that I think Qurate might actually be able to benefit is they have some scale. It’s so hard to get noticed on the internet that you’ve just got to pay. And whether or not you want to call it a toll booth or tax, whatever, I don’t know, but you’re paying the tax man. And that tax man’s Facebook and Google.
Tobias: And just to clarify before we were talking about Post Malone.
Bill: Yeah, that’s true.
Jake: I was talking about Karl Malone.
Investors Should Read John Malone’s Liberty Letters
Bill: Definitely not John Malone. John Malone delivers on Sunday too, all day. I’m telling you, I’m reading these old Liberty Media letters. God, these guys are smart, man. I mean, I can’t believe that he called the top in 2000 and just issued a bunch of debt. What a beast.
Tobias: How is it calling the top?
Bill: Well, what they did is they saw Sprint and CenturyLink and they were like, “This is insane.” So, they issued a bunch of debt that’s convertible into those shares, and they got 30-year maturities. So, what Liberty Media used to be was basically a publicly traded hedge fund. It didn’t have any cash flow engine in it. So, they issued a bunch of convertible exchangeable debentures is what they’re called and they come due in 2030. It brought in a bunch of cash up front. And then when everything imploded, the stock that it was convertible into was so far out of the money that they just were able to get rid of the shares and they had the cash. And that gave them some of the funds to buy QVC, and then QVC actually was the engine that got the whole Liberty Media complex running [crosstalk] lot of their cash flow from.
Tobias: That’s interesting. Did you figure that out from reading the filings?
Bill: Francisco sent me a bunch of his old letters. Sorry, if you get bombarded with asks now, Francisco. 2001 to 2013 or something, Malone used to write letters. They’re awesome.
Tobias: Oh, cool. Got to check that out.
Bill: I can send them to you, sir.
***
Does Value Investing Still Make Sense?
Tobias: That’d be good. I’ve got a good question. This probably for you, JT. Now that bear markets have been cured, does value investing still makes sense as a concept?
Bill: Nope. I’m kidding. [laughs]
Jake: Of course. Getting a good deal on something, however you define that, which is my version of value investing, still makes sense. Now, academic version, this too shall pass. We have not suspended the laws of physics. This is temporary. Enjoy it, watch the show. Don’t get sucked into it. Don’t think that you’re going to be out before the clock strikes midnight because that’s very unlikely if you’re a– [crosstalk] There’s no dancing by the door, that doesn’t work. But yeah, enjoy the show. Marvel at the spectacle that is human behavior and be ready to take advantage of it when we get back to reality.
Bill: I think the one thing that I’d follow on though is, I don’t know that– when you think of ’09, there was a massive liquidity implosion and a crisis at the center of the banking system. I don’t know that you can bet on seeing that kind of valuation implosion. I do understand that it just went back to the mean. So, maybe that wasn’t even evaluation implosion. But this is why Peter Schiff has got me twisted in knots. I don’t know that I would bet on the market coming down. I do think there’s a real chance that we just incinerate paper currency. That’s the thing that [crosstalk] somewhat top.
Jake: By the way, historically, a surprise inflation is not good for markets– [crosstalk] So, everyone who’s like, “Oh, I’m going to ride the melt up because of inflation.” Look at Zimbabwe. I don’t think that historically that’s necessarily always been the right bet. But maybe eventually it becomes the right bet but usually get crushed first.
Bill: You can’t hide in cash though, because you’re just dealing with toilet paper at that point. It’s a hard predicament. It’s not an easy time. This is why I think gold– people that say I buy a little gold, I get that, that makes sense to me.
Montier’s Investing In The Age Of Financial Repression
Tobias: This is Montier’s investing in the age of financial repression, you’ve got two options. You either swing now and run the risk of catching the downside. But then you continue to participate if it goes on for a very long period of time. Or you don’t swing now and you have your purchasing power with all the way. But if it comes back, then you’ve got an opportunity to deploy capital. So, there’s no good answer. There’s no easy answer.
Bill: I’m glad he feels that way because I’m wearing a shirt that rhymes with his and that’s how I feel.
Tobias: I think that came out like 2015 too, that’s an older piece of his. I might be wrong about that. But that’s why I’m surprised now how long ago everything came out.
Jake: That might even be a little older than that.
Tobias: Is it even older than that? Yeah, possible.
Jake: We’re getting old, Toby.
Tobias: So am I.
Jake: [laughs]
Bill: Jerry Maitland ask me about Walmart Plus. I think they’re going to crush it. I think Walmart Plus is going to be a massive success for Walmart. Walmart is firing on all cylinders. That thing’s a monster. People weren’t wearing masks last time I was there, but whatever.
Tobias: Stock’s going very well, it was very cheap in about 2015, 2016. And hadn’t done anything for a decade. Calls were super cheap too, had leaps in it but I think they all expired in 2018 but that did work.
Bill: You know what I’ve been messing around with in my head on Qurate, is whether or not calls are the better way to play it because I do think you have a super levered equity stub here and if you really want to super juice it, the leaps could be interesting. I’m saying it reminds me of you can be a stock market genius. And that’s what Greenblatt said, there’s certain situations where you think the skew is in your side that hard. I don’t like adding a timing element to the bet though, that’s where it gets tough. It’s hard enough to be right.
Tobias: I don’t know anything about this but it’s an interesting question.
Jake: It’s taking the leaps in your bet though for two and a half years, that would have made more sense.
Tobias: Yeah. Can you get them out two and half years?
Bill: Dude, but think about what his leap have done today?
Jake: [laughs]
Bill: [chuckles] Even if they had a lot of vol in, they’d still be up huge.
Tobias: Do you guys know anything about– Thoughts on TCI’s Leo Hindery SPAC taking desktop metal 3D printing, has backing from Bill Miller. I don’t know anything about it either. Sorry.
Bill: TCI guy and Bill Miller, I love Bill Miller. That dude is mad creative.
Tobias: Bill Miller or TCI?
Bill: No, Bill Miller. TCI is the old Malone entity. It was swallowed into AT&T and then AT&T spun out Liberty Media and then you get the whole Malone– [crosstalk]
Tobias: Well, Leo Hindery then I guess is the bloke.
Bill: Yeah, that’s right.
Tobias: What about Twitter? There’s a few comments on Twitter here. Let me just pull one up.
Bill: Elliott Turner loves it. Elliott Turner’s a smart dude.
Tobias: That’s his big bet.
Bill: Yeah.
Tobias: Sorry, I just can’t find it. Yeah. I think it’s under-monetized compared to everything else that I use but their ad targeting is rubbish. The difference between the mobile application and the desktop application and TweetDeck, they’re so different. There’s no ads in TweetDeck.
Jake: Is there anyone even running Twitter at this point? Or is it just sort of its own autonomous– [laughs]
Tobias: Yeah, well, I know that Jack’s in there halftime when he’s not in Africa.
Bill: I tell you what, though, the Twitter machine, I have seen things that I am seeing improvements in the experience that I had not seen previously. And I do think that there are the beginning signs of them maybe turning that asset into an actual monetization machine.
Jake: What was the last Twitter ad that you saw?
Bill: Dude, I don’t know. They’re–
Tobias: Do you mean advertising? Or do you mean–?
Bill: No, dude, I can tell you what it is. And this is why, because it was an Apple ad and I’m kind of resentful of Apple right now for no good reason other than I friggin’ sold it too quickly. So, I just let the Apple ad run. I think I ran it five times in the background today and it just kept running on loop. And I was like, whatever. I think it’d be funny if they get billed for all this. So, that was the last ad that I saw.
Is YouTube’s Push For Ads Hurting Its Business?
Tobias: We’re running out of time here. But just one last comment. Does YouTube’s recent bombardment of ads hit the product in the long run? I don’t think so and this is why. They’re trying to get you to subscribe. They want subscribers. It’s $12 a month. I’ve taken the plunge because I just couldn’t take another ad and I’m sorry for all the ads that run on this thing. I don’t know how they decide where to put them in. But it’s degraded the experience on everything that I watch on YouTube. But that’s why I paid the $12 a month. We could move to another platform to do this live or post it on another platform. But then, we’d probably be charging for it and you get a lot more content if you go through YouTube, probably.
Bill: I’ll tell you what, I know how much I’m making on this. It’s not [crosstalk] us.
Jake: We’re never going to make any money on this, Toby. [crosstalk] [laughs]
Bill: I appreciate all y’all listening. And the people that put up with the ads, it is not our choice.
Tobias: It’s exposure, you’re getting exposure.
Bill: That’s right. Yeah. Well, especially in this shirt.
Jake: Overexposed.
Tobias: That’s time for this week. Thanks, folks. That was really fun.
Bill: Buffett, I love you. I’m sorry. If you listen, I’m sorry. I’m on a podcast, I’m supposed to say controversial stuff.
[laughter]Tobias: Hot takes. See you, folks.
Jake: Bye, everybody.
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