In this episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle chat about:
- Masa Son’s Huge Tech Option Bet
- Slime Value Investors
- Creativity in Value
- Credit To Michael Burry
- Update On Bill’s Big Bet $QRTEA v $ZM
- Tesla Misses Out On S&P 500 Inclusion
- Lazy Balance Sheets
- The Beginning Of The End
- Slack v Microsoft
- Big Oil
- Buying Bloomberg
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:
Tobias: We’re live.
Jake: Are you sure?
Tobias: [laughs] Had to hack space and time, it’s all a bit weird. We’re there. It’s way, way late. Sorry, folks. 45 minutes late. It’s 11:15 on the West Coast. I don’t even know what that makes it? 2:15 on the East Coast.
Jake: This is the level of excellence that you’ve come to expect from this crew.
Bill: That’s right. I don’t come here looking for tech-savvy.
Tobias: I’m totally spent trying to put–
Bill: Listen, I know we need merch. There is a part of me, this is embarrassing to admit, I know that I seem like a man that has all his shit together. I have no idea how to run an internet store. I am embarrassed of failing and having a terrible-looking store. It’s part of why it’s not done. It’s an unacceptable answer. But it’s honest. So, that is a–
Jake: It’s hard to imagine how we missed FAANG with this tech skill–[laughter]
Tobias: Oh. [sighs] I’m totally spent after trying to hack the back end of this beast.
Jake: Toby’s got flop sweat for days right now.
Bill: Yeah, he came in here sweaty and after all this is just– you’re going to need water.
Tobias: Shot. Yeah.
Bill: We might as well go into the intro, I guess.
Tobias: Yeah, let’s do it.
Bill: This is Value After After Hours.[laughter]
Bill: I’m one of your hosts, Bill Brewster, here with my esteemed colleagues, Jake Taylor and Toby Carlisle. Jake, what are you going to be talking about today?
Jake: I’m going to cover slime molds and capital allocation.
Bill: All righty. I’ve seen some of those companies in the past. And Toby, you’ll be talking about?
Tobias: Yes. Masa Son has gone absolutely bananas. He’s had this monster bet on a variety of stocks. I don’t know exactly but mentioned in the article that I read, Amazon, Netflix and Microsoft. He’s had a $50 billion notional, which is like $4 billion in premium and calls, on top of the $4 billion in stock that he earns. Absolutely swung for the fences, which– just like Buffett tells you to do when you get a little bit behind, just go for it on a margin–
Jake: Yeah, double down.
Tobias: –in the option swing for it, and if you blow up, then that’s what happens. No, he doesn’t say that at all. That was the ’83 letter.
Bill: [crosstalk] Okay. Yeah, I was trying to figure that one out. And I’m going to talk a little bit about creativity in the equity markets. So, with that, who wants to start? Toby, let’s get the good stuff.
Masa Son’s Huge Tech Option Bet
Tobias: Yeah, let’s talk Masa. There’s been an enormous amount of option speculation in some of the frothier names, in some of the techier names. And there’s been this the NASDAQ whale, and nobody really knew who or what the NASDAQ whale was. One of the conspiracy theories was, it’s an associate of Musk’s, putting these gigantic calls in way above the market in Tesla’s stock, which makes– There’s some delta hedging. So, if you’re the person on the other side of that call if you’re a market maker or you’re a bank or someone, and you’ve made that call in order to hedge yourself, you have to get longer stock, which in turn pushes the stock up and it’s a self-reinforcing cycle.
Bill: Okay, and taking a step back, Toby, that’s because when you are selling the calls to the counterparty, you’re negative the delta. So, you buy the stock to offset your negative exposure.
Tobias: Right. You’re hedging yourself. That’s right.
Bill: There you go.
Tobias: And so, if somebody big comes to a bank and says, “I want to do this big option trade,” you can’t turn them away. You’ve got to take the other side of that bet. You’ve got to try and lay it off as much as you possibly can. And one of the ways is by buying the stock long. So, there was this conspiracy theory. It’s now been shown that it was probably Massa in there buying but it’s Masa with a whole lot of Robinhood behind. So, Masa is like $4 billion long.
But then, Robinhood is another $50 billion, not in the notional, $50 billion in premiums. So, he’s a big portion of that market, but not that entire market. But it’s come out on Friday in the Wall Street Journal and a few other places that he’s the one who’s been behind all of this, presumably because he got a little bit behind. He’s had [unintelligible [00:04:25] in a few of the little– stubbed his toe on a few other things. And maybe he’s trying to play catch-up. And so, one of the comments that I saw I thought was interesting was Masa’s not so much a tech visionary as a speculator, do you think that’s fair given the latest trade?
Bill: Ooh, I don’t know. I’m not going to– whoever that is on the Twitter machine that goes under Masa Son cap, I’m not trying to make enemies.
Tobias: [laughs] Do you think that’s Masa?
Bill: I don’t know. Dude, I have no idea. That’s certainly– it feels Icarusy, doesn’t it?
Jake: I feel like we have to know a lot more about strikes before we can say a whole lot.
Bill: We’re on a pod, dude.
Jake: We don’t know where they’re– I know, you just got to speculate wildly but–
Bill: Hot takes!
Tobias: There is also some suggestion that he might have sold some calls to get into those positions, so he sold the calls further out of the money and so that’s where you would sell a stock presumably and so you fund the calls a little bit, which is pretty smart trade. That’s not– and there’s no reason why–
Bill: [crosstalk] –spread for those at home.
Tobias: There’s no reason why putting those trades on isn’t a good trade, it’s size.
Bill: [crosstalk] –month, there was different durations.
Tobias: Didn’t have the detail in the article that I read.
Bill: Come on, Wall Street Journal. Come on. Yeah, I don’t know, man. I don’t know. That options markets, that’s some scary shit if you don’t know what you’re doing.
Tobias: I think it’s scary if you do know what you’re doing.
Bill: Yeah, no doubt. No doubt. I had a buddy that called me up and he’s like, “I think this stock’s going up and I’m going to buy the calls.” I said, “Do you have any idea what happens if volatility comes in on you on that stock?” And he was like, “What’s that?” I was like, “Don’t do it. Do not do it. You’re paying a lot for the air there.”
Jake: Well, that brings up a good point, though. Tesla today now is, I don’t know what the latest is, but off 16 or 17– [crosstalk]
Tobias: It’s back to where it was on 11 August. It’s back to where it was a month ago.
Jake: Yeah. But I think there’s a lot of potential for schadenfreude in this game. And I think we would be doing a good service if we encourage people not to take too many victory laps here. Honestly, you can feel bad for the people, even though I know there was a lot of overconfidence going into it and a lot of YOLO, what seemed like–
Bill: Bruh, are we saying that people are dunking on people because of one day? Because last time I checked, it still doubled since February 21st, which was a pretty high point.
Jake: Yeah, but there’s probably a lot of people who are in calls there that are going to expire.
Bill: Yeah, no doubt.
Jake: And they thought it was going to keep going. Those are going to be huge losses. And probably more likely, money that those people actually needed. So, I’m just saying, here’s a chance to be a little bit more compassionate, human, and not feel– This game is humbling. And unfortunately, some people are going to be learning that the hard way. So, let’s try to lift each other up instead of just tear each other down.
Bill: This is part of what my beef is with my perception of Robinhood’s fundamental product. My perception, which is not truth but its perception, is that they tend to benefit from driving a little bit riskier behavior such as margin loans and trading options. And people that don’t know what they’re doing, which I’m sorry– if you’re growing that fast, I find it hard to believe that the pool of investment professionals are just like going to your product. It’s on average, people that are less sophisticated. That is a dangerous fucking combination. That’s what I’m trying to use whatever voice that I have on Twitter to say like, “Do not do this shit, especially now, especially chasing froth.” People are probably– I don’t know, I know that I said something that really triggered Mr. Lieberman once. I apologize if you have done all your due diligence and you’ve determined that the due price is the price to buy at. A lot of people aren’t doing that. Don’t play that game. That’s my message.
Update On Bill’s Big Bet $QRTEA v $ZM
Tobias: You’ve got a good little charitable thing going at the moment, Bill. You should talk about that and I’ll stick the link in the show notes again.
Bill: Oh, yeah. Well, we mentioned it the other day. I got Qurate Retail Group–
Tobias: It doesn’t have to be the bet. Just the link, so we can– [crosstalk]
Bill: Well, yeah, we will [crosstalk] juggernaut that’s QVC is up against Zoom. It was rough out of the gate. [exhales] [laughter]
Jake: Yeah, he took one right on the chin.
Bill: Oh boy!
Tobias: That’s value. 50% down out of the gate.
Bill: That I didn’t expect. Here, I just thought that this is kind of a cool financial transaction and a better than perceived business. I didn’t realize that Zoom would go add $40 billion in market cap on– I think it was day one.
Jake: Yeah. Good timing on that one.
Bill: Whatever, that $40 billion’s value just like today’s loss and Tesla’s value. [crosstalk]
Tobias: I think it’s funny that the trade or the bet reflected both of you– Both of you guys thought you had the best side of the bet because Austin thought that– he’s like, “Well, they’re going to announce results the next day and the result is going to be good and the stock’s going to be up a lot.” And you thought because you’re a fundamental guy, you’re like, [crosstalk] “Well, there’s going to be three Christmases, so there’s going to be three opportunities for–”
Tobias: Now, you’re going to be 50% behind on day two.
Bill: Yeah, that’s right. I remember– I think he said that he wanted the bet to end in like the middle of February and I was like, “No, no, I got to report–” [crosstalk]
Tobias: You [crosstalk] let it run.[laughter]
Tesla Misses Out On S&P 500 Inclusion
Tobias: Just to go back to what JT said, this is one of the things that I’ve learned from being in this market for a long time is that, in relation to momentum in particular, you can’t short it or just speak against it on the way up because you look like an idiot. And Tesla’s a good example of that. And then, when it reverses course, you can’t do that because you look cruel. It’s a good opportunity to be stoic.
Jake: Yeah, that’s the tough thing. Based on the short interest that plummeted rapidly as Tesla went parabolic, obviously. They’ve gotten nuked, too. There aren’t any winners here, except for the people who cashed out and then probably insiders who have sold it at these nosebleed prices.
Bill: To be fair, Musk was saying a long time ago, he thought the stock was way ahead of itself. As much as I got beef with him, even he was saying like, “Yo, calm down here.”
Tobias: And the funny thing is, it’s a much better opportunity now than it was–
Bill: And that’s like 3X from where it still is when he said that.
Tobias: But the funny thing– at the peak– From now to the peak, which is what a week ago, the opportunity is so much better now because now they’ve got $5 billion in the skyrocket. They’ve got 5 billion in the pocket.
Bill: Yeah, good for him. I was right. He should have raised more.
Tobias: Well, you raise what you can,
Bill: I know a lot of y’all knew that. I’m not trying to say I was right– [crosstalk]
Tobias: They’ve got it done at the market which everybody was like, “That’s a bit weird.”
Bill: Do you think Masa was the one that was taking it down to try to juice his calls? [laughs]
Tobias: Probably, why not?
Bill: Yeah, I know. You’ve got a bank. [crosstalk] I’ll tell you what’s wild. First of all, shoutout to Vitaliy. He wrote a funny article, I think it was last week or whatever. When he was like, “Tesla now has space exploration embedded in its valuation.” That was a good one. The one thing that I think that has really caught a lot of value guys off guard over the last five or whatever years, and I’m about to speak negatively of my beloved Liberty complex. But I asked at one of those meetings whether or not Spotify– I can’t remember his name. I’m pretty sure his first name is Jim, but whether or not Spotify was a threat to Sirius XM. He said that he didn’t think so, and that radio has always been there. To me, it’s a share of year game. And if you don’t think that Spotify is a risk, I’m not sure that–
Maybe, I didn’t ask the question the right way, maybe he would agree to that, but just generally speaking, the incentive for some of these companies to go out and have a burn-the-field– just like go get market share when people have such patient capital because there is not a huge opportunity cost of capital right now. It’s one of those like Buffettisms. I may not know who wins, but I know to short the people in front of the train. Or at least get off the tracks.
Tobias: That doesn’t sound very Buffett like. [laughs]
Bill: No, he did. He said, when the car was invented–
Tobias: You’re going to have to know which–
Bill: –the easier bet was to short horses rather than know which car manufacturer is going to win. So, just sort of interesting to keep in mind when you’re underwriting stuff.
Tobias: Yeah, you didn’t have to know which car company was going to win to know that you wanted to be short the horse.
Tobias: The other thing we should mention is Tesla missed the– there was some question whether it would be included in the S&P 500, and it needed it’s–
Jake: And by question you mean rampant speculation? [chuckles]
Tobias: There’s a lot of speculation. Yeah. It has met the technical details, one of them was four quarters of profitability. And so, they could have been included. But this is one of the dirty secrets of the S&P 500. It’s managed by a committee, it’s not purely passive. And they’ve done this before.
They have elected not to include Tesla just so everybody knows, but they’ve done this before. They did it with Google, because Google ramped and then should have been included, they didn’t do it. And then I think they ended up including them like 20% higher at least. It could have been 70% high or something like that. So, there’s still hope Tesla, guys, they could include it. They could include it next year.
Bill: That’s some meta stuff right there. If you’re like buying the calls to drive the share up to hope that it would get included. That’s a game that you won’t see this guy playing.
Tobias: Stock market operator.
Jake: That is fundamental 101.
Tobias: Yeah, that’s stock market operations.
Bill: [crosstalk] But the thing is, if you’re playing that game, you don’t have to be a fundamentals guy, right? There are ways that certain people win in that game without– now I will never play that game. But that would be really wild if that was a peek into what actually happened. There would be a part of me that would be like, “Dude, I kind of respect that, but I also don’t respect it.”
Tobias: I mean it’s something. Rampant into–
Bill: [laughs] It is something. Some Jesse Livermore shit right there.
Jake: I don’t agree with you, but I respect the hell out of you.
Bill: That’s right. That’s exactly right. I’m not getting in the water with you, but I respect the game that you’re playing.
Tobias: There’s a meeting on 9/21 where they discuss Tesla again. Okay.
Bill: Who? Oh, the S&P?
Tobias: I guess. Yeah.
Bill: I won’t hold my breath. But I’ve been wrong on it before, I’ll be wrong again.
Jake: So, by calls is what you’re saying?
Tobias: [unintelligible [00:15:31], yeah.
Bill: Well, dude, but that’s the thing. The first order of thought is like, “Oh boy, puts have got to be cheap, but that’s what I was saying about vol, right? No, they don’t at all. This all may be priced into the option and you may be right on the direction, just get crushed on the option trade. So, do not play that game unless you know what you’re doing.
Tobias: Yeah, you can get it going both ways, too. That’s what you want. [crosstalk]
Bill: I’ve tried to do that [crosstalk] stock. I’ve tried to sell iron condors because they’ve been like super-wide, so, I’m selling the put spread and the call spread on both sides. And then, it just like blows through on both sides. And I’m like, “All right, I’m out of this thing.” I try to just harvest the vol, gets screwed, tried to be long, the puts get screwed. I’m out of it. I never want to talk about that–
Tobias: You can’t do anything with popular stocks. That’s what I’ve always found. Anything I ever tried to do in a popular stock, I’ve just done it wrong. I’ll just do it in the stuff that nobody’s looking at, sometimes it works.
Why Do So Many Startup Names End With -ly?
Bill: Yeah. I was saying you guys earlier for you Momo Bros, Fastly is trading pretty strong today if you like that relative strength game.
Tobias: Is it trading fastly?
Bill: I think it’s trading hardly.
Bill: What’s up with the “ly’s” at the end of these names?
Tobias: I think that Paul Graham said, it’s the mullet of names, the L-Y.
Bill: It’s like a second grader named this shit. “What do we want that website to do?” “We want it to go faster.” “Oh, Fastly!”
Tobias: Or I-F-Y. Spotify, Shopify, Intensify.
Bill: Fy’s, I like though. I like being some Shopify and some Spotify. The ly’s, I don’t know. Maybe it’s just a name thing, I’ve never liked the ly’s. Actually, there was two ly’s I like. Shoutout to the ly’s out there.
Tobias: Whose topic is it?
Bill: [crosstalk] –folks, I don’t know, we’ve been drinking the whole time.
Jake: Bill, do you want to talk about creativity?
Slime Value Investors
Bill: No, let’s talk about slime.
Jake: All right, let’s get slimy, some veggie time. All right. Slime molds are these blobs that are created out of single-celled amoebas that then Voltron together to become the slime molds. And you’ll find them in soil or in a rotted-out tree stump or something.
Bill: Can we talk about what Voltroning together means? It sounds like they just come together. Nice Topo Chico.
Jake: Yeah, the Topo. I need the Topo. [crosstalk] We need to be sponsored by Topo.
Bill: It’s like Coke money.
Jake: Yeah, they’re the single-celled amoebas, but they join together to create these molds that will look like a mushroom. Some of them will basically almost sacrifice themselves into the structure so that out at the tip, they will release these spores that typically will get picked up by an insect or something and moved. And they trigger this behavior whenever they start getting low on food. So, the amoebas, they eat bacteria. To avoid starving, they Voltron together and increase their chances of survival.
Tobias: So, they’re trying to shift the entire– they’re trying to move the culture somewhere else. They’re trying to move the organism or organisms somewhere else. They band together to hope that some of the genetic code keeps on going somewhere else.
Jake: Exactly. Everyone focused on this emergent social behavior that they’re doing. And they missed the fact that there were a bunch of these little slime molds or amoebas who didn’t join the mold, and they hung out away from it.
Tobias: The value investors.
Bill: [crosstalk] [laughter]
Jake: I was wondering like–
Bill: [laughs] [crosstalk] –y’all got killed.
Jake: Yeah. There’s this evolutionary biologist at Princeton, whose name is Corina Tarnita. And she discovered that all of these particular amoebas would hang out. She sampled a bunch of them and determined that it was actually a genetically induced behavior, which meant that there could be some selection bias for it. Some of them just based on their wiring, from their DNA, choose not to join the slime mold.
So, now it seems counterintuitive that if you don’t help, you’re just going to sit there and starve, where would be the selection pressure for that? But what ends up happening is that they– if the food is to come back suddenly, then these guys are in prime position because they didn’t actually join the structure and harden up, like physically change shapes so that they can’t then take advantage of the new food supply.
So, it doesn’t take a whole lot of leap to start thinking about like capital cycle theory, and when does your capital allocator decide to deploy the resources. William Thorndike, famously in The Outsiders was talking about how these capital allocators, they’re iconoclastic and that’s another word for loner, and these loner amoebae, there’s a lot of overlap there. They choose not to participate in the social– what the herd is doing, what the slime is doing, and they hang out and wait. And then, conditions change, and all of a sudden, they’re in the driver’s seat.
The other thing I wanted to talk through was Pat Dorsey has this really good slide that’s talking about how cap allocation, someone who’s good at it is a rich source of market inefficiency. And the reasons why are, number one, it’s unpredictable. So, it’s really hard to model a good cap allocation if you’re a Wall Street analyst. Number two, it’s unconventional. A lot of times they’re creating value through acquisitions, which is not the norm. Normally, acquisitions end up being value destructive for the acquirer.
Number three, they’re lumpy. The value creation ends up being financially messy, it tends to come in spurts. And they’ll do buybacks in big chunks, tender offers. So, it’s nonlinear often. And then, the fourth thing was that they’re patient, so they’re not focused on meeting short-term projections. And he ties it all together with this really nice saying that, “Structurally low-balled market expectations create enormous opportunity.” So, we can almost think about our heroes of cap allocation as being the loner in the slime mold paradigm.
Jake: If you really want to torture biology.
Tobias: Going to get that quote on the cover of the next book.
Tobias: I love that analogy, and I think that’s very apt for investing. Is it Pat Dorsey saying that these guys are sort of chronically– or is it Thorndike or Dorsey saying these guys are undervalued or this strategy is sort of undervalued, the capital allocation guys?
Jake: Dorsey says that it’s structurally ignored or underappreciated from a market perspective because of those traits. And then, Thorndike did a bunch of vignettes of different cap allocators and what they have in common.
Tobias: I have a little bit of trouble accepting that, honestly. If these companies that run optimally, then that’s about as well as they can go. And all of The Outsider guys do is run these companies optimally. And most of the businesses in the market are run by folks who are either not good at capital allocation or they’re more interested in making more money for themselves. There’s just other issues rather than it being some superpower that you need to–
Graham’s Double Counting
Graham calls it double counting. The company’s doing really well, plus they’ve got management who are really good. Yeah, well, you think that they’re good because the company is going well, but let’s look at this thing, trough cycles, if you still think they’re geniuses then.
Bill: Well, I’ll tell you who is managing pretty well right now, is the guys at TransDigm and I think HEICO too. What’s interesting about TransDigm to me more than HEICO just from a financial story perspective is, they have so much leverage. All of this should hit the fan in March, they went out and raised money and they brought $4 billion in cash on the balance sheet. It has been interesting to watch those guys manage liquidity through the game, and make sure– because I think I’ve said that before, but you go bankrupt when you run out of liquidity. Nobody really goes bankrupt on debt, it’s when you no longer have the liquidity to justify refi.
Lazy Balance Sheets
And HEICO could do this, too. HEICO sort of does it through what I think asshole finance people would call Lazy Balance Sheet because it’s not like super– [crosstalk]
Tobias: That’s my favorite line. Lazy Balance Sheet. That’s what I like. I like a lazy balance sheet.
Bill: [crosstalk] -family company once and somebody– [crosstalk]
Jake: I call that resilient.
Bill: Yeah, somebody was like, “You got a lazy balance sheet.” And the guy’s like, “I run a family company, bro.” It’s not lazy, it’s just called secure. But anyway, it’s different. It’s cool to watch. It’ll be interesting to see, I think they’ll both have capital allocation potential on the back end of this because I suspect the rest of the supply chain is not– [crosstalk]
Jake: You know who also has got a big chunk of capital on the balance sheet right now? It’s Musk.
Bill: Oh, yeah. Here, I thought you’re going to say the Buff Dog, but–
Tobias: Well, Buffett does too, but to give Musk credit, he’s held on until it got to this point, then knocked out five at the market right before it falls over. Pretty good.
Bill: Yeah, good for him, man. That was awesome.
Jake: Probably [crosstalk]
Tobias: Credit where it’s due. Yeah, he did.
Bill: Yeah, that’s right.
Jake: I like how that works. How did those at the money raises work? Do you understand the–? [crosstalk]
Tobias: Another question is– [crosstalk]
Bill: [crosstalk] –direct listing on Robinhood and people buy them.
Jake: I hope that’s not– [crosstalk] [chuckles]
Bill: [crosstalk] –bankrupt ones. That’s directly to one firm.
Tobias: When did they find out that they weren’t going to be included?
Bill: [crosstalk] -actual, all opinion this is for entertainment purposes only.
Jake: What did they find out?
Tobias: Yeah, that they weren’t going to be included?
Jake: Friday night, I think.
Tobias: After the placement was closed. Okay. Fair.
Bill: But still, good for him, good move. I’ll tell you what, if the stock craters and he buys it back in, ooh, that’ll be– even I’ll have to–
Tobias: No, they need the money. They can’t buy it back at this point.
Jake: There’s no buybacks when you have like 20 factories to– [crosstalk]
Tobias: You buyback at $70 a share.
Bill: Yeah, that’s what I’m saying. I’m saying just wait until it comes in. 20% is nothing on this company.
Jake: Why would you buyback your own factories when you could buy Fiat’s factories for so much cheaper?
Tobias: That’s a good point.
Bill: I don’t know but I know that the world will give you the debt, so retire the shares.
Tobias: That’s a good point too.
Jake: That’s your answer to everything. [crosstalk]
Tobias: [laughs] Lazy balance Sheet.
Bill: [crosstalk] Fuck.
Tobias: Flip it to the Fed.[laughter]
Bill: Flip it to the Fed. Yo, Jerome, I need some money to invest in China. Okay, I think we do that now.
Jake: I need some liquidity.
Bill: As long as it’s through some special purpose vehicle, I think that’s in our charter. Anyway, I’m getting into things I don’t know about.
Jake: All right, let’s get creative.
Creativity in Value
Bill: I’ve just been thinking lately. There’s an element of investing that is the value bent. That’s always look at the downside. But I think the other side of things is being creative enough to see the upside when the world is pricing something as if it’s going to die and trying to fathom– everybody understands what a Monte Carlo simulation is, but I’ve been trying to get my brain to think through what a Monte Carlo simulation might look like. Now, I can’t do it because I’m just an idiot.
There’s a lot of upside and downside possibilities, and just trying to envision the skew– And I think we saw it in mid-March. People that got paid certainly were helped by government action, but also a lot of it was being able to fathom that the world was not actually going to end right away and seeing that we would get through this when it looked dark. I think that you can bring that to companies. There have been pitches that had been made on– I can’t say tailored brands because I just don’t see the upside there. But like GameStop, I mean, there’s a way–
Tobias: Hasn’t it gone [crosstalk]?
Bill: I don’t know, but I can’t–
Tobias: I think it is.
Bill: People aren’t going to go buy suits. But GameStop, it’s not something that I can get into, but I can understand. Maybe, there is a creative outcome in the world where– if you think your downside’s limited, sometimes I have in the past underweighted the different ways that things could go. And I think that it’s also important if you’re buying one of these hyper-growth companies. I know that on this show, we always talk about like, “Oh, well, how do you know it’s sustainable?” But I think it’s important to think through how that stuff can happen. And I just think that in the equity game, creativity can be rewarded in a very positive way. And you’ve got to be careful about how you harness it. But I do think that that’s some of the art evaluation.
Tobias: But isn’t that what value investors do? Look at things close to the– look like the markets?
Jake: They don’t look at the right tail enough is what Bill’s saying.
Tobias: I see.
Bill: Yeah, I don’t know that. When we’re talking value, we’re talking the traditional, grumpy value guy. And I think that–
Jake: Toby is sitting right here, I guess. [laughs]
Bill: No, I– [crosstalk]
Tobias: I wouldn’t say I’m grumpy.
Bill: Dude, you know how I feel about you. I think you underweight your quality bent too much.
Tobias: Yeah, that’s fair, I like quality, but I think it’s value.
Jake: It’s easy to say it, this market.
Bill: No, it’s true. But if you screen Toby’s portfo– well, the hypotheticals– No, the strategy [crosstalk] of Toby funds. The second factor that picks up is quality. So, it’s not just like a bunch of junk.
Tobias: Because I like lazy balance sheets and cash flow.
Bill: That’s right, yeah, so lazy. I like it once they hit refi button.
Jake: That’s where you’re going wrong.
Bill: Anyway. [laughs] I don’t actually like that. Somewhere, Chris Bloomstran is like, “God, this kid won’t learn.” Anyway, I don’t know. I lost my train of thought.
Credit To Michael Burry
Tobias: I think that Burry doesn’t get enough credit for his recent– Like, I think that’s what Burry was doing when he’s bought calls on all the FAANG names but then again–
Tobias: I was just sort of half shitting on Masa before. Now. I’m saying credit to Burry for doing exactly the same thing, so sorry about that. Masa, yeah, good job. But Burry like–
Bill: I think when Burry did it is quite a bit different if my perception is correct from when Masa did it, but I don’t know, maybe not. Masa might be running some big Momo game and that might make sense.
Tobias: I read those calls on those FAANG names as him hedging the right tail which Jake and I’ve discussed it, that might have been Jake’s idea that I stole, but that’s his right tail hedge.
Bill: Yeah, it’s smart.
Jake: Well, the economics are different of a lot of these businesses. The returns to scale, with a zero marginal cost product, digital, most of these. It is a different game. I’m not sure if you priced the right odds for that game necessarily on any given day in the market, but it is a different game. And I think that it was easy to miss that, and I missed it for a long time, probably till it was too late to do anything about it.
Tobias: My question is if Burry’s not running public money, he’s just running his own money. I think is– he running a fund these days or a partnership?
Bill: I think he does whatever he wants.[crosstalk]
Tobias: But he’s got–
Jake: I think it’s his money.
Tobias: Do you have to file if you’re just running your own money?
Jake: I think if you’re an entity, yeah. I don’t know, I’m not sure.
Tobias: It seems odd. Anyway, we do know that he’s filing anyways, 13Fs throughout. If you’re just an individual, why would you get the right tail hedging? Why do you need the right tail hedge, why would you care?
Bill: Oh, I don’t know there’s an opportunity cost to the world getting wealthier than you, in real wealth terms.
Tobias: He’s worth a couple hundred million, isn’t he?
Bill: Well, maybe he wants a couple hundred more, dude.
Tobias: I guess. Fair enough. It’s not like he’s–
13F Investing Does Work
Bill: That honestly could be it. Maybe it matters to him what his scorecard says, and he doesn’t want to lose on that particular bet. This is what I go back to when I talk about incentives. You’ve got to understand– unless you’re talking, in my opinion to the person that’s making the trade and you understand why they’re making it, following people into stuff just isn’t the game to play because you don’t know why the hell they’re doing it.
Tobias: There is that research that shows that the 13F investing, that does work. You’ve got to follow all of Meb’s rules, one of which is don’t buy the biggest position in the 13F filing because that’s when they’ve had the big run on.
Bill: There you go.
Tobias: Rather than their best idea.
Tobias: Which might be their penultimate.
Bill: [crosstalk] -in Meb’s podcast again. Is he still doing it?
Tobias: I assume so. Yeah, he is. Yeah, he was traveling for a little bit.
Bill: Meb, we love you. It’s not that none of us don’t listen. I got some things I should swap out because I do like his pod. He’s got a strong pod.
Tobias: I listen all the time.
Bill: [crosstalk] -it’s not Acquirers Podcast, but it’s fine.
Tobias: The problem is that when we went through the March lows, I think everybody went– and there’s no commute, but the last thing I want to do in the gym is listen to a bloody finance podcast. I’ve got to listen to pop music.
Bill: That’s fair.
Tobias: And I haven’t put [crosstalk] back on the rotation yet.
Jake: There’s so many good ones, it’s hard. You’re going to feel you’re missing something important–
Bill: Not here.
Jake: –because you are. You don’t miss anything important here.[laughter]
Tobias: At least you know the production quality is 10 out of 10 on this podcast.
Jake: Yep, exactly. Timeliness.[crosstalk]
Bill: Dude, I’ve got to tell you though, I like our pod. I know that’s like kind of conceited. But I listened to it. I’m like, “Man, I like these guys”. And then part of me is like, “Yeah, this is my wife’s biggest complaint with me.”
Jake: Well, I’ll sit there and watch ours. And then, I’ll just be laughing my ass off and my wife will look and then she’ll just shake her head at me in a very, very negative way. [laughs]
Bill: It’s like the story of the politician’s wife, why does it work? We both love the same person.
Bill: [laughs] There you go.
Tobias: What a savage.
Bill: That was a real quote. I forget whose wife said it, but yeah, she said that when she was asked.
Bill: No. It was true.
Is It The Beginning Of The End?
Tobias: So, there’s been a little selloff in the market, fellas. Is that the beginning of the end?
Bill: No dude. Inning one.
Tobias: Or is it the end of the end?
Jake: Yeah. Let’s get an update on that any one hypothesis after–[crosstalk]
Bill: I don’t see this– I don’t know what Barry’s last name is on the Twitter machine. But I think Barry’s a pretty thoughtful dude. And he went through this whole thing the other day about how FAANG is not all that expensive. And once Barry bails, then I will-
Tobias: I agree with him. FAANG is not that expensive.
Bill: –start to say that we’re at the top. I like his feed. I think he’s a thoughtful guy. And I think he makes compelling arguments for why we can go a lot higher. So, until I start to see– and Bloomberg today was like, “Oh, tech selling on valuation concerns.” Valuation concerns are not a top.
Tobias: I mean we will be on valuation concerns, aren’t we? We’re sort of talking technical at this point.
Jake: Yeah, that was 2016, maybe 2017. That was a valuation concern.
Bill: We top when this podcast capitulates and buys some of these names.
Tobias: Get some YOLO calls on the FAANG.
Jake: All on the sword for me.
Bill: That’s right. You see me take a big position in something like Zoom, that’s to the top.
When Tesla Breaks The Whole Thing Goes
Tobias: I have had a theory that when Tesla breaks, the whole thing goes because I think that Tesla is the thing that is most emblematic of this market that it’s a busted growth story. The growth just isn’t there. In the financials, there’s just no growth. The financial statements are impenetrable and it’s not generating cash flow. It survives by raising capital. I don’t know if this is it, but that’s kind of my feeling.
As to the FAANG, as I always say, Netflix is lucky to be in there. But the FAAVM, which is the real– the good stuff. They’ve been pretty beaten up the last few days.
Bill: Netflix might be good, man.
Tobias: Maybe but stop the negative free cash flow. I’ll just wait, just don’t– [crosstalk]
Bill: But here’s the thing, but why? If you’re them, why would you? Right now, if you were running that– [crosstalk]
Tobias: Because you run out of money.
Bill: Yeah, but they’re not going to, that’s the whole point.
Tobias: At the rate that they’re spending it, they might. Clearly, they can control that a little bit.
Bill: I think the difference between me and you two is I think that there is no end to what the debt market is willing to finance.
Tobias: Well, that’s fair.
Bill: Which is absurd, but that is what I think. It’s not what I want to finance, but that’s what I see going on, and I just don’t see that changing.
Tobias: That’s fair. That is entirely my bias. I like to see companies internally financed. I think that I’ve been in the market for long enough that I’ve seen those moments when big companies go to try to refinance and the debt market seizes up, and then the shit hits the fan.
Bill: Yeah, that’s right.
Tobias: I just would never want to put myself in that position. I would never want to have a company that does that.
Bill: I’ll tell you what, I think Netflix could do cash flow. I think they could generate cash flow if they wanted right now as it is.
Tobias: Just stop spending.
Bill: I have poked some fun at Zoom partly because I like to poke my counterparty in this bet. But one thing that’s interesting about that is you can see the cash flow inflection up on some of these companies once the growth either outstrips the growth spend or the spend sort of slows. I mean that was an interesting peek into financials.
Tobias: I think Netflix is a little bit different though because the other companies are– Microsoft has recurring revenue for one product. One suite of products really. Amazon, absolute beast. Google, absolute monster. Facebook, similarly, a little bit more fad driven. Netflix has got this rotting produce that it produces every year that it’s got to shift and if it doesn’t– none of that stuff keeps particularly well.
Bill: No, I dig. There’s a very legit case to be made that there’s a lot of maintenance spend in what some people would say is growth and that– I do find it interesting that some of these older companies take the shot to actually invest through the income statement and the shares just puked. It’s like, “Oh, earning’s a bit done, screw these people.” Meanwhile, some of these growthy names can just blow capital and as long as the top line is going, people are like, “Oh, that’s fine.” They’re just investing through the income statement. It’s like, “Wait a second.”
Tobias: Has Walmart managed to transition? Do you think is it being regarded more– with Walmart Plus and buying Jet?
Bill: Yeah, I think– [crosstalk]
Tobias: They’re still tipping money out the door on that thing. It’s like burning a billion dollars a year, something like that.
Bill: Yeah, Walmart Plus is a good idea. [crosstalk]
Jake: The question for some of these is how big do you have to get to finally get to some scale where you’re profitable? You would have thought it would have happened already.
Bill: Yeah, I don’t know, you’re talking about the globe. I have conflicting opinions on this because on one side, there’s the finance guy me that wants see the profit. And then, there’s the other side, if I was running these companies, I would not stop pressing the advantage right now. I’d probably issue more shares than these companies are issuing, I’d probably try to get a little bit more cash for a rainy day. But I understand spending a lot.
Jake: Lazy balance sheet?
Bill: Yeah, I’d have an aggressive, aggressive income statement and a pretty lazy balance sheet given the facts on the ground.
Bruce Wasserstein – There’s Going To Be One Winner
Tobias: Bruce Wasserstein, who was an investment banker, one of the great investment bankers, he only passed away in the last five years or so, I think. He used to have this talk that he would give that apparently was– when you trying to get the CEO to do the deal, you’ve got Bruce in at the last moment. And Bruce said, in this industry, there’s going to be one winner. And that winner is going to pay up an astronomical amount of money to buy second place or whatever. And thereafter, it won’t matter. And so, basically, here’s your moment to be great. And this is why you’re going to spend more money than you can possibly imagine to do this deal which is great you’re an investment banker.
Bill: Well, on the other side, though, is you look at what Buffett and Munger did with the Buffalo News. They basically did that to torpedo the competition out of the market. If you’re looking at the income statement, the cash flows, that thing did not look good for a little while. But the profit on the back end was worth it. Even those guys have gone a little bit nuts in that game at times, but it had to make sense on the back end.
Tobias: All right, folks, throw your questions in.
Jake: We have Jay Paul to blame for all this shitty Netflix content, is that what I’m hearing?
Tobias: That’s basically my take.
Jake: Connect the dots.
Tobias: How can they spend so much money and have it all be so bad? That’s what I want to know.[laughs]
Bill: There’s some good Netflix stuff. I haven’t watched Netflix in a long time now.
Tobias: There’s some good Netflix, something I haven’t watched in a long time.
Bill: There’s so much shit, why would I just wait to get the good stuff?
Tobias: YouTube’s free. They pay nothing. They pay it off the– [crosstalk]
Bill: That’s because they load our videos with ads and don’t give us anything. Send me our money, Google. Come on.
Jake: I did enjoy on Netflix recently the Inside Bill’s Brain. I thought I was getting inside Brewster’s brain, but it wasn’t. It was Bill Gates. Actually, it’s pretty good. Pretty well done.
Is Buffett A Dollar Bear?
Tobias: Here’s a question. Is Buffett a dollar bear? Buffay. Phoebe Buffay.
Bill: Those guys have been concerned about the deficit for a really long time. So, I don’t see why they wouldn’t be concerned now.
Jake: He’s been worried about inflation for 50 years now.
Tobias: Has he been wrong?
Jake: I don’t know. I’m not sure.
Tobias: He wrote an op-ed for the Wall Street Journal. I forget when but 10 years ago, 15 years ago?
Jake: 2012-ish, I think. Yeah. Was it Monetary Emissions or something like that?
Tobias: That’s it. Yeah.[crosstalk]
Bill: Somebody says here, SaaS valued at 20 to 40 times, Athreya Ramkumar. Okay, I’m sorry that I messed up your name. But anyway, what I would say is, be careful I think about just looking at revenue multiples and translating it across industry. I like to price things off gross profit. It’s a little bit truer to me. We used to bank a commodity company, so this is some of my bias. But we were sitting in a meeting and the guy was like, “Everybody loves revenue. If I wanted to be a $5 billion company, I could do it tomorrow.” He’s like, “I don’t give a shit about revenue, you don’t get paid on that.”
Tobias: Sometimes you do.
Bill: So, just keep that in mind. Yeah, that’s true.
Hedging TLT Puts
Tobias: Opinion on TLT puts to hedge against rising rates. TLT is the 10-year Treasury ETF. Puts on, so it would have to fall– yeah, to hedge against rising rates. I think the thing about TLT is that it tends to rally when the market crashes and so you got to eat that first. TLT is tough.
Bill: Wouldn’t just buying gold be an easier hedge?
Tobias: Probably. Gold mines get the– [crosstalk]
Bill: I think that idea is potentially overcomplicating it.
Jake: There’s nowhere to hide right now. It’s all financial repression.
Bill: I don’t have good thoughts on Discovery. I don’t have them. There’s something about Zaslav that I don’t like.
Bill: I think it’s his parties and his pay.
Tobias: [laughs] Slack is the next Microsoft?
Bill: Imma fade that one.[laughter]
Tobias: Let’s just talk about the thesis a little bit–
Jake: Didn’t even take much thought.
Is Slack The Next Microsoft?
Tobias: The thesis would be that Slack becomes the new platform. And then, you use everything else of Slack somewhat in the way that Microsoft Windows is the platform and I guess they– where do they make most of their money these days, Microsoft? Excel?
Bill: Well, [crosstalk] it’s everywhere.
Bill: It’s the whole system. You got the Azure. The problem was Slack is, I know a couple CEOs, not enough, but a couple, they all fucking hate Slack. They’re like, “All my employees do is bugged me with useless stuff. It wastes everybody’s time. Use email.” Now, maybe they’re stodgy old men that don’t understand where the world is going. But in my mind, if you can’t get CEOs to buy in, Slack’s going to have an upward battle. And that is based on nothing but anecdote and probably a stupid take. So, discount it for what it’s worth, which was nothing.
Tobias: That’s a tough one.
Jake: Yeah, this gets back to the question of, are our cities over with? Are we all working from home? And if so, then maybe Slack has some appeal in that world, and I’m not sure where I fall on that. There’s some pretty good arguments either way that we might go back to a more normal world when we can.
Tobias: But once again, that’s like the Buffett line, “You don’t have to know which car company is going to win to be short the horse.” There are ways to short horses here without having to pick Slack. And as Dave Taggart’s got it in the– I don’t want to put it up. So, I’ve got a comment here I want to ask you guys about – Teams is adding more users than Slack. I tried to use Teams, it’s bloody hard to use. Slack was much easier to use. I think I had to record a podcast on it, and I did it once and then I deleted it from the computer enraged.
Jake: From Teams?
Tobias: Teams. I don’t know what it is about Microsoft. I think that everybody’s got all day to login. Same with Skype, but just a garbage login experience. All right, here’s question. Why does Buffett dislike NYC banking/bankers? Clearly, thinks BAC will be the next winner from the banking sector. What’s his analysis based on?
Bill: I don’t think that the New York City thing has much to do with anything. He bet on JP Morgan and that’s a pretty New York City bank. Now, you can say, “Well, he sold it,” but it’s not he didn’t like it. I think he liked Bank of America more now for some reason. Ask him.
Tobias: You guys got any views?
Bill: My strong opinion, and I hate going Buffett. He may have a good reason to sell Wells Fargo that I am completely blind to and I’m a moron. And I will acknowledge that. Their opinion of Wells Fargo is not something that I hold in strong regard, given how wrong they have been for so long. Charlie really went to bat for Tim Sloan and that guy was a worthless sack of shit. He destroyed that company. And if you think I’m wrong–
Tobias: That’s Bill’s personal opinion.
Bill: No, fuck that.
Tobias: Does not represent the opinion of the podcast. [laughs]
Bill: [crosstalk] Read the congressional documents. That guy ruined that bank and he put it in the position that it’s in. That bank is not in problems because of what they did. They’re in trouble because of what they didn’t do to fix it. And that guy’s the reason. You know what, screw him.
So, the idea that they liked him and now have some problem with Scharff, who came in and implemented a lot of the suggestions that actually address the congressional problems, because he doesn’t want to move from New York, because he loves his family? Get out of here, man, with that nonsense. And now, they’re betting on Bank of America, and Moynihan did the same shit. He didn’t move down to their headquarters. And they had a lot of problems when he took it over.
So, I have a lot of problems with this analysis and why doesn’t he like Scharf living in New York? I think people aren’t seeing what’s really going on or he’s not, one of the two. It’s my strong opinion of the day.
Jake: Yeah, I like it. Make that a regular segment.
Bill: I don’t like to go at him and they’re so smart, and it doesn’t feel right, but I really do think if that’s what’s going on here, they’re wrong.
Tobias: Everybody else says Teams is easy to use, so I take it back. I’m an idiot.[laughter]
Bill: I can’t even sell a fucking coffee cup. I don’t know. I’m sorry if I’m cursing a lot.
Big Oil’s Floor Value
Tobias: What do you guys think about the big oils and what components would establish a floor value? It’s crazy how small big oil is in– a little oil now, in index.
Jake: Baby oil. [chuckles]
Tobias: It’s like 4% or 5%. It’s kind of comical. Exxon used to be 40% all by itself.
Bill: By definition, it’s got to be cheap enough at some point. I know we’re only in a compounder world, but I don’t see oil going away over the next 20, 25 years. That’s probably really aggressive. I think a lot of this anti-oil stuff is like very first world looking down on what developing world needs to get better. It’s like, “Oh, well, we sucked all the resources out. Now, you guys have to deal with all the problems.” It’s like if you were in the developing world, you’d be like, “No, I’m using oil to do what you did because we can’t eat.”
Jake: Yeah, very convenient of you to pull up the ladder into the treehouse since you [crosstalk] up there.
Bill: Yeah. And then you want to sell me the technology? Yeah, that sounds like a great deal for me.
Jake: Yeah, you’re right, though. Energy consumption is the prime mover of society and wealth really, and material– your experience. So, the idea that we as Americans get to have 2X or maybe even more the average human on the planet, and that’s just the way that it has to be and no one else gets to, it’s not very cool.
Tobias: That’s why you have the big Navy.
Jake: Yeah, that’s true. Maybe that’s the smart move. Well, yeah, I don’t know. Can you hedge your oil with defense contractors? Although it’s kind of a same bet, you go bomb something in the Middle East, the price of oil probably goes up.
Tobias: It’s hard to see how it gets out of its own way at the moment.
Bill: There’s got to be some companies in there that have value. I mean Midstream has got some value, I think. Buffett seems to think so too.
Tobias: It’s amazing how volatile– I’ve seen, think in the last 10 or 20 years, there’s been two trips to $100 and back. It’s not hard to imagine that we go to $100 again. Peak oil thing, that was pervasive, and it wasn’t that long ago. Between 5 and 10 years ago, it was just assumed that oil was just going to get exponentially more expensive. You had to do increasingly heroic things to dig it up, to suck it out of– deep water drilling, which is why I like– there are multibillion-dollar projects that suck that stuff out of the ground. I mean, did we just get really good at that all of a sudden? Surely, we’re consuming more than we were 10 years ago.
Bill: As a globe?
Tobias: Yeah. We’ve got to be right.
Bill: Yeah, I think so.
Tobias: I mean, maybe not right. I don’t know.
Jake: If you’re like a gold miner, especially like a– we’ve joked about this before on the show, but take a levered gold miner and they owe dollars, let’s say, and they’re able to take gold out of the ground and then pay back with increasingly worthless dollars, and it’s an interesting thing happening there. I don’t see a big difference between a levered oil company either. You’re basically taking something out of the ground, and you’re paying back that debt with increasingly worthless dollars. You’re sort of making the same implicit bet.
Tobias: Somebody says here cheap capital equals cheap oil.
Bill: Yeah, that’s probably fair.
Tobias: That make sense.
Bill: You get a lot of dumb guy– I mean, well, not dumb guys. Probably smart guys playing a smart game, just dumb financing to incentivize production. The one thing on Bank of America and Wells that I didn’t say. Bank of America is going to have a big relative scale advantage coming out of this and they do have more non-interest revenue, so I get the bet. If that’s why they’re diverting funds, I get that. I take up problems with the New York thing.
Tobias: I got an interesting one here. What do you think about Ackman SPAC buying Bloomberg?
Bill: There’s only one place for Bloomberg.
Tobias: You don’t get the silly premium if you sell the Berkshire.
Bill: You might for that business.
Tobias: Does Bloomberg care? It’s $45 billion– if it’s 55 or 45, makes almost no difference.
Bill: Look, if I was Bloomberg, I would really sell to Buffett, 100%. I think it’s the perfect asset, that entity.
Tobias: What about baby Buffett into his SPAC?
Bill: I got love for Ackman. I would not trust that Ackman would allow my entity that I built to be run in the same way that it has been built in the same way that Buffett would.
Tobias: Why would Bloomberg ship it? Only if he was trying to run for President, right?
Bill: No. I mean after Trump, why sell?
Jake: How much is in Ackman’s SPAC?
Bill: Put in some blind trust.
Tobias: Yeah, not enough.
Bill: The Ack Attack could raise the funds.
Tobias: You’d have to raise more. I think he’s got four in there at the moment. But if you say we’re doing a deal, we’re buying Bloomberg, we’re going to go back to the market for another 20, you’d probably get that done.
Bill: Yeah, you can raise it for sure. I’m telling you that asset belongs in Berkshire.
Bill: It’d be a great business.
Tobias: Probably, it would be a nice cap for Bloomberg but why would Bloomberg sell at this point?
Bill: Yeah, I don’t think he will.
Tobias: What are you going to do? The presidency was the only kind of– that’s probably a stepdown but the only possible job that he could do that’s not running Bloomberg would be– it probably wouldn’t have as much influence.
Bill: If you were him and you wanted to leave your family a more diversified set of assets, I think that there is one genius in the entire world that can figure out how to get that done for you and minimize your taxes. And that’s Buffett.
Tobias: Yeah. Flip it into– get it back in Berkshire stock. That’s a no brainer, right?
Bill: That’s right. You can get a pretty tax-advantaged and you basically put your family into a S&P fund with really, really good capital allocation. That is what I would do.
Tobias: To be fair, though, it’s not like Bloomberg’s descendants are going to be ruined forever, even where they are now. His grandkids’ grandkids are going to be–
Bill: Yeah, no doubt.
Tobias: –idle reach.
Bill: It’s only what I do.
Tobias: The question everybody wants to know, Jake, mustache, you’ve gone full lumbersexual. We had Detective Jake from the Sacrament PD on this weekend. Now, you’ve gone plaid.
Jake: Yeah, I’m Lieutenant Dangle right now.
Tobias: And on that note, folks–[laughter]
Bill: What was that show on HBO with– it was weird. You could be on that show. You’re creeping me out a little.
Tobias: I think it looks great, man. I think it looks good.
Bill: Yeah, I mean, like for entertainment.
Jake: It might only have one more week left in it. It’s a fair amount of itchy factor. It’s not long for this world.
Tobias: Grow it up. Make it make it big. See how big you can get it. You’re not allowed to shave it until value starts outperforming.
Jake: Oh Christ. This is– [crosstalk]
Tobias: Do the Jesse Felder. All right, fellas. We made it. Sorry, folks, we were running so late today, that was entirely my fault. It turns out that you get to reinstall everything when Skype updates and Skype updates every week. Every time I turn it on, new version of Skype.
Jake: Every hour.
Tobias: Every hour.
Bill: Don’t expect us back tomorrow at the right time, or next week.
Tobias: We’re going to try.
Bill: Yeah, but just carve out a couple hours.
Jake: We’re like the cable guy. From 8:00 to 5:00, keep that window open.
Bill: That’s right. We’re live somewhere between 1:00 and 4:00 Eastern.
Tobias: All right, folks. That was fun, next week. Ciao.
Bill: Take care.
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