In this episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle chat about:
- Baby Carrots-Zugzwang
- The Future For Value Investing
- Is Twitter Mr Market?
- Investing Model Deviations Last 5 Years
- Short & Long Term Investors Can Both Be Right
- Mark Leonard & $CSU.TO
- Buffett & $SNOW
- The ARK Fund
- The Equity Risk Premium
- Japanese QE & Inflation
- Bill Ackman Buying Hedges
- $PTON’s Forward Returns
- Neel Kashkari – The $700 Billion Man
- WWE Rights
- Tobias’ Strength Program
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. It’s 10:30 on the West Coast, 1:30 on the East Coast, 6:30 Australian Eastern Standard Time, 6:30 PM UTC, something like that. Consult your local directories otherwise.[chuckles]
Tobias: It’s the 2020 wrap. We’re going to bury 2020, put a stake through its heart make and sure it doesn’t get back up again. The year in review. How are you, fellas? What’s happening?
Bill: Lots of people talking a lot of shit out there. That’s what’s happening.[laughter]
Jake: Really? I haven’t noticed.
Bill: I said on the Twitter machine that I was scared. I’m not trying to imply that I think people should sell. Sometimes, I’m worried about who follows me or whatever. That’s not the comment. I’m just saying, there is some serious chest pumping going on. “Sub to my newsletter because I’m up so big.” I would run far away from that shit, but that’s just me.
Jake: There’s a lot of geniuses right now.
Tobias: Let’s give a shoutout to Townsville. Townsville in the house. Good job, Townsville, in Australia, in Queensland, far north Queensland. Quick trip to the Great Barrier Reef from there.
Bill: The funny thing is the year I put up used to be considered a good year and I would never fucking promote it like I see some people promoting themselves. I find some of this stuff offensive. That’s all I had to say it today. If you’re young and you’re listening, stay away from the hucksters. Don’t play into their business, worry about your own.
Tobias: It’s been so long since I’ve had one. I don’t even know what I would do anymore. Probably, I’m going to spike the football if it happens.
Bill: Well, you deserve that.
Jake: [laughs] That’s just so overdue.
Tobias: It takes skill to miss this bad repeatedly. You can’t do it by accident.
Jake: So unlikely.
Tobias: Randomly mashing the keyboard, I’d be doing better.
Bill: But here’s the thing. If you did, I think you would deserve it. But then, the other side of it too is, I don’t think that you’d be like, “By the way, here’s what I’m selling and you need to buy it now.” You’d probably honestly, given who you are, you’d probably be like it was better to buy it when it was a lot cheaper than it is now, but I still think it’s a good strategy. I don’t know, man. I guess it’s what finance always has been. I shouldn’t even care about it, but it bothers me a little.
Tobias: Well, that’s the theme for 2020 then.
Jake: [laughs] “I’m bothered a little.”
Bill: Promoters, man.
Tobias: PNG in the house. Here we go.
Jake: What do we got for topics today?
Tobias: I didn’t actually prepare anything. I just thought we’d do a year in review, like the chem professor, David– Geez, I’m blanking his last name.
Tobias: Collum. Yeah, Collum’s year in review.
Bill: I got some. I could probably start if you guys want me to–
Tobias: Kick it off.
Bill: Jake, you want to talk about what you’re going to talk about? You got veggie light, right?
Jake: I’ve got little bit of veggies. Yeah. What Toby was calling Baby Carrots.[laughter]
Jake: Yeah, I have this concept from chess that I’m going to try to torture an analogy out of.
Tobias: Now, we’re talking my language, although I can’t talk too much because I’ve been playing– now, I’m going to forget his name, too.
Tobias: Kyler, KH Turbo. He’s just been pantsing me on chess. I’m going to just be quiet now.
Jake: Oh, no.
Bill: I told him my Chess.com rating, which I will not announce in public because it’s embarrassingly low, and he just laughed at me. I was like, “Whatever, dude, I’m learning.” [crosstalk]
Tobias: He’s at 1841, 1841 is like a scratch golfer.
Bill: Oh, yeah.
Bill: Yeah, that’s terrifying. He would just take me to the woodshed every time.
Tobias: Sorry, JT.
Bill: On my screen, I’ve got attacked on the bottom left corner yesterday, and it just freaked me out. I didn’t know how to respond. They just picked me apart. I just had to push my king all the way into this corner. I was like, “Oh, I’m fucked.” Once that happened, I knew I was dead. Sure enough, I was, not too long. Anyway, I’ll start this thing off.
Mark Leonard & Constellation Software $CSU.TO
This weekend, I had posted– the Mark Leonard interview had come out. I thought it was a really good interview. There was a question about, “What advice would you give to a company that wanted to attract–?” Or, “What advice would you give to young company?” His answer was try to work hard to attract the shareholders that you deserve. Then, subsequently, he commented on how index ons are becoming more important part of what they do. I made the typical error of hearing what I wanted to hear and not what he was actually saying.
I sort of sent out a tweet– well, I did send out a tweet. I guess it was half of what I was actually thinking. Part of what I am slightly annoyed at about that entity is, I have tried– now I haven’t gone fully forensic through the internet, but I’ve tried to find information on it. It’s a really difficult entity to find, transcripts relatively or any type of direct source information. I always feel I’m messing around with hearsay on it. I really don’t want to invest based on hearsay. I know that everybody likes the shareholder letters. I think they’re okay, they’re not mind-blowingly awesome to me. I was looking for more information. That podcast, I thought gave a really good peek into how he thought.
Tobias: Why did he keep on getting it taken down?
Bill: I didn’t want it out, and I get that. He had some personal stuff that he said on it. I won’t share it for that reason. I want to respect his wishes in that way, but I had said something on Twitter. I got legitimate pushback, and I appreciate that. I think that part of what is awesome about Twitter is if you’re open to hearing people push back on you, you can receive the other side of things.
Tobias: So, you’re talking about Constellation Software, CSU.TO is the take away, talking Mark Leonard, who’s the ZZ Top bearded CEO. The man, the myth, the legend. You could go back a couple of decades, early 2000 starts writing these letters that are very Buffett like in relation to acquiring internet-based, web-based businesses, software, VMS, vertical market software businesses. The letters are better than Bill’s giving him credit for.
Bill: I mean, I like them.
Tobias: But who writes a letter like that?
Bill: I agree with you.
Tobias: If you didn’t know who he was and then you found the letters, if you went the other way around–
Bill: I’m not shitting on the guy. I like Mark Leonard.
Tobias: If you read the letters, you’d be like, “This guy is legitimate.”
Bill: I get it. That’s what I’m saying. Part of my error was I was imposing too much of my own wants on what that– he does not exist to serve me. Honestly, he could probably care less that I exist, and he probably should care less that I exist. My only point is– or what I was trying to convey is if you’re trying to attract shareholders, like I perceived myself to be, I think that open and honest podcasts, like a guy like that, I will partner with. I will trust him. The way he broke down how he thought about certain things and where he saw people making mistakes or how he thought about things, I believe in him after that.
What I’m really trying to say with the tweet, which I can’t or didn’t, because one, I didn’t frame it right, and two, its Twitter, is I think companies should put out stuff like that. I mean, if you really want partner shareholders, and you are open to almost doing like what we did on our podcast, like being honest and admitting maybe some vulnerabilities in how you’re thinking, but also why you’re willing to accept that and what you’re willing to give up strategically. I think that’s how company communication should go in the future because I think this IR-canned adjusted EBITDA bullshit is for the birds.
I hope that as the internet enables communications, my naive hope is that maybe more people put out stuff like he did and keep it up. The personal stuff, I understand why he kept it down, and it was for internal consumption. It wasn’t supposed to be shared. I’m not trying to go at him.
The other thing that happened on Twitter was I got into a little bit of a Peloton– like Chitchat Money. They interviewed Ryan Reeves, who I like, and he is bullish on Peloton, and they tagged me in it. It forced me to think about it more. I was actually thankful that they did that. I have the same conclusion that I had before, but I think that if you’re open to people pushing back on you, Twitter can be super powerful and the Peloton conversation made me sharpen exactly what my beef is with that and why I don’t believe in it.
My third episode was I sort of pushed back on Puru. Puru, if you’re listening, you took that a little bit weakly. I wasn’t trying to really come at you but I don’t think you’re a big-time bank investor. I’d say it to your face, I’m saying it now. I think that’s why your returns are good. If you’re pissed off, go enjoy your returns, bro.[laughter]
Bill: Why are you getting mad at me saying that you’re not a bank investor? Come on, dude, you’re up 400%. If I was up 400%, people could take a shit on me and I wouldn’t care. Whatever, I’ll clean it off with all these dollar bills, y’all. Anyway [crosstalk] podcast.
Tobias: [crosstalk] [laughs]
Bill: That’s [crosstalk] top of my mind. I think there’s a very positive way to use Twitter. Part of me was snarky with Puru. I;ve got to own that but he was talking about something he has no idea about. I do have a little bit of an idea, so I get a little bit offended when people take shots at banks because I’m emotionally attached to that because it’s where I came from.
Tobias: When do banks make a comeback? That’s all I want to know.
Bill: I don’t know if they ever do. [crosstalk]
Tobias: They’re allowed to start buybacks and so on.
Bill: Yeah. Well, look, dude, his comment was that the Fed is propping up the banking system and enabling buybacks, because they just approve buybacks. Guess what? The Fed is propping all this stuff up. If you don’t think that tech valuations are propped up by the Fed, you’re taking crazy pills. If you think that it’s just banks, you’re out of your mind. That’s my comment.
Tobias: I don’t think that it’s affecting banks too much.
Jake: Yeah, exactly.
Bill: [crosstalk] –crushing banks, that’s my whole point. They can’t make money because of what the Fed’s doing. If you think that they’re under reserved on their loan losses, we’ve got our ass kicked over and over and over again because the regulations are so tight on what banks are allowed to do now that a lot of the risky stuff is in these alt lender unitranche facilities that have no covenants, and we had to go to compete with things called covenants. I’m sorry if your brain doesn’t accept the fact that banks are actually safer than they used to be. I can’t help you with that. They are. You don’t have to believe me. Believe any of the good bank investors, but a bunch of generalists having stupid opinions about banks doesn’t go too far in my mind. So, I push back.
Honestly, state of SaaS, it’s made you so much more money, why would you ever look at banks? If I push back, don’t get mad at me.
Tobias: Happy Holidays, everybody.
Bill: [crosstalk] –thinking about.[laughter]
Tobias: Happy Holidays, everybody.
Bill: I like the guy. I do like him. I don’t have the beef that other people have with him. I’m just saying. That’s what’s been on my Twitter mind.
Tobias: Didn’t you just come off the golf course? Get yourself a Christmas chardonnay.
Bill: Dude, I am actually upset because I really wanted to drink a Cab on this podcast, and I came in and I had to run up to the office and now I’m stuck with this Spindrift. I did want to have some alcohol today. You guys got hats on, I don’t have anything.
Tobias: Sparkling water.
Jake: Go get it. We’ll just kill some dead air for a while. [laughs]
Bill: I’m not trying to rant. I mean I know I am ranting.
Jake: I like it.
Bill: It’s not nearly as angry as it sounds.
Jake: Yeah. Couple points. One, back to the Mark Leonard thing, I agree with you. I think there are businesses that are doing things the right way from a longer-term capitalism sustainability standpoint. I want those people to be exemplars and to plant a flag and to show the way for others to follow. I think there’s maybe not enough of that. A lot of it’s because it’s like, “Hey, I don’t have time to be out here running a PR thing, because I’m running the goddamn business. That’s my job.” But at the same time, I think there’s still a lot of societal good that is done by business that gets glossed over and could be highlighted by some of these really talented and smart CEOs and management teams that are doing it the right way.
Tobias: But then, isn’t that what they’re doing? Their letters are pretty good. They do have a business to run. You can’t always be just sitting on podcasts.
Bill: Look, the smartest pushback, and this is why I do honestly like Twitter. I don’t want them to sit on podcasts and run some promotional podcast strategy. What was pointed out to me by Nick, [unintelligible [00:14:00] I don’t know what his current handle is, but he was like, look, this guy is optimizing for his employees. He’s not in it for you or the market or whatever. That is really useful. My brain was not thinking in that way and I was really thankful that he wrote back to me in that way. I did learn if you’re going to say something about CSU that’s negative, you better come prepared because the shareholder base is coming for you.
Tobias: This is the traditional airing of grievances part of the [unintelligible [00:14:39].
Tobias: What’s airing of grievance? What am I airing? I’m not airing anything. I think that this is the power of that platform. To Jake’s point, with all the time that these guys spend, all these sell-side conferences, recycling the same bullshit, how about you sit down and interview–? You could accomplish more for your shareholder base with an interview in that type of format that they did, for the real shareholders. Forget about the institutional people. Some of which are real, but whatever.
Jake: Who have all the money. [laughs]
Bill: Yeah, and they get the access anyway.
Tobias: Let’s talk CSU. CSU is a great business. It falls into what I would regard as invincible–
Bill: It’s incredible.
Tobias: -founder, owner, operator, CEO doing absolutely cracking job in an expanding sector, massive TAM. The stock price is always super expensive. What’s he doing wrong?
Bill: He’s not doing anything wrong. That’s my thing.
Tobias: If he’s trading at a bit discount, then go and give the weeping interview. But otherwise, just keep doing what you’re doing. Keep crushing it.
Bill: I know. Well, that’s what I think people said to me, and they were right. [crosstalk] My whole point is if I got defensive about my position, then I wouldn’t have realized that I was the one being stupid, and I was. But the power of Twitter is enabling you to send out that thought and then get meaningful feedback and be like, “Dude, you’re being an idiot.” You know what? They were correct. I think that receiving the information when you’re stupid, and not getting offended is a very useful part of that tool.
Tobias: Yeah, that’s good.
Jake: Quite the rub your nose in it device, huh?
Bill: Yeah. As long as you’re willing. If you dig in when somebody clearly points out something that you’re wrong on and you’re like, “Oh, now I’m going to fight.” All right, whatever. That’s on you. It’s made me much smarter. The Peloton conversation did, too.
Tobias: No disagreements. Let’s do Jake’s topic.
Bill: That stock is priced for a rosy future.
Jake: Oh, man. Always has been.
Bill: It could have.
‘Jake: With the popularity of the Queen’s Gambit and chess apparently is all the rage right now, I thought it’d be fun to take a concept out of there that I actually learned about relatively recently, and then– not through chess, and then see if I can torture an analogy out of it for us, as I am want to do.
Tobias: That’s what we do.
Jake: That’s what we do. Toby, you probably already know what this is given that you’re like a chess God.
Tobias: No, I’m a terrible chess– I’m like a [unintelligible [00:17:25] 1400 to 1600, that’s my rating, just so you can all have a good giggle. You can come and play me on the chess machine and see how bad I really am.
Jake: [chuckles] There’s this concept, and I’m sure I’m saying this wrong, but something like Zugzwang. It’s spelled Z-U-G-Z-W-A-N-G.
Tobias: I don’t know.
Jake: All right, good. It’s actually German for compulsion to move. The concept is that there’s oftentimes in the game, especially towards the end game where because you have to move, you’re in Zugzwang, or whatever it is. It means that you’re putting yourself in a disadvantageous position because you have to move, and one of your moves are good moves, and you know it. When markets are frothy like they are right now I think is relatively safe thing to say, although apparently, no one cares, you have to ask yourself, “Am I actually forced to move right now? Am I in Zugzwang?” or, however the hell they say it in German.
I would say that for many professional investors, the answer for them is yes, because especially if they have shorter-term-oriented clients, they want those easy returns when they’re available. Then, they don’t want the losses when those come around. They are in a place where they have a compulsion to move. They can’t watch everyone else making this easy money. They have to participate. If the song is playing, they’ve got to be dancing. Well, you kind of invert that, who would you say, is the best at keeping themselves out of the compulsion to move?
Tobias: Warren Buffett.
Jake: I think that’s a good answer.
Jake: Right. Isn’t every single one of his moves about the future chess game were not being in a place where he has a compulsion to move? You could almost say he’s optimized for flexibility to move by the avoidance of being put into the compulsion to move. I find that to be a really interesting inversion. If you’re not a professional and you don’t have outside capital that’s demanding the easy money, this is where your real advantage lies, is that you can afford to not put yourself in places where you have a compulsion to move, you don’t have to do what everyone else is doing to avoid the career risk.
Tobias: I love that concept. You’ll find it appearing in my next book, as soon as I learn how to spell it.
Jake: [laughs] Yeah. I’m going to expect some credits at the end of that book.
Tobias: You can get credit. I’ve described it in a different way in the book, but I understand the concept. I’ve been in that position many, many times. That’s not uncommon as a chess player to be–
Jake: Like every game. [chuckles]
Tobias: I win about half of them, but just against weaker opponents.
Jake: By the way, I don’t need any credit because this concept’s like 400 years old.
Tobias: I try to give credit where it’s due. I think you’re doing counter for real in the market. Lots of people are considering now, do you sell? Probably you can hold on to it next year. You’ve got lots of gains, do you sell this year and incur short-term capital gains tax payable next year? Or, do you hold for long-term capital gains?
Jake: Or long-term losses.
Tobias: For theoretical long-term capital gains next year. You got to get through, I guess you got to get through the March 2021 minefield to collect on them and then you push it out. The time value of money question that is very material. That’s a really difficult decision to make. I wouldn’t want to be in a position having to make that, that Zugzwang in investing.
Jake: Yeah, you avoided that by avoiding all those gains, that was well played.
Tobias: Yeah. Just bought a whole lot of value stocks when the market fell over.
Jake: Stepped around that landmine. [laughs]
Tobias: Very Buffett like sort of head to the future. [laughs]
Jake: You’re playing the long game. Congrats.
Tobias: Really, really long game. Just waiting for value to turn, that’s Zugzwang all by itself.
Jake: Yeah. Bill?
Bill: I don’t know. Mike Bartlett wants me to shut up, so I did. Also, I don’t like you either, Mike. I would say that the other thing is just because of that, like you don’t have to swing, you can also choose to swing in spots. Ryan Reeves is smart guy. That guy’s not just buying Peloton on a Momo thing. There are assets that you may see a spot in, but I agree with you. I wouldn’t avoid something because it’s optically expensive. I wouldn’t go into something because it’s optically cheap. I think you’ve got to be super choosy right now though because right now is not the time that people are underwriting really bearish skewed underwriting assumptions. So, if it’s going to outperform to the upside, I think you’ve got to have a pretty good reason it’s going to do it.
Jake: Yeah, there’s a lot of upside baked into the cake already in these prices.
Tobias: Yeah, the concept of Zugzwang, are we encountering it again now? There’s some stuff out there that– few of those FAANG stocks, you can get– if you can get comfortable with the growth, which is the hard part. But if you can get comfortable with it– I think Google, Facebook probably, even though I don’t particularly like Facebook, but Google, maybe Microsoft, they’re in that range where there is going to be some positive return. I don’t know where it gets over your hurdle. What other options are there in this market?
The Equity Risk Premium
Bill: My man [unintelligible [00:23:53] and I were talking about this today. He’s reading Terry Smith’s book, and Terry Smith is talking about– I mean, this part of why I believe in the melt-up. He’s talking about like, if you can get equity at a premium to bonds, then you should buy it, where you think long term bonds are.
You can get yourself if you don’t think that inflation is coming and you think that the real rate of interest is pretty low because of all the deflationary aspects of tech, and then you layer on the fact that I truly believe the working assumption is that the Fed will not let the equity market implode for some big risk. Now, I think that you almost have idiosyncratic reasons that your business can go down, but I think the assumption is the equity risk premium as a whole has come in a little bit. The Fed has basically, they threw a lifeline to everyone.
Tobias: What were they doing when the other time the market fell over, since 1913?
Bill: I don’t know, you have to ask Jamie Cartwright or whatever, Investor Amnesia. What’s his last name? Is it Cartwright?
Bill: I’m sorry, Jamie. He’s way smarter than I am on history, but I don’t know.
Jake: He’s really tall, if you know that.
Jake: I said he’s quite tall also.
Bill: Is he?
Jake: Yeah. Anyway.
Bill: I don’t see how that’s relevant. Thank you.
Bill: Do you have any other comments?
Jake: Yeah, I’ve got some other nonsequiturs for you.
Bill: All right. I just think that if you want to believe that stuff, then rates are low and the premium– your spread, for lack of a better term, is tighter and you can get some pretty crazy math–[crosstalk]
Tobias: What’s the relationship of the ERP, the equity risk premium? The equities over bonds ,what’s the relationship of that in forward returns?
Bill: Well, if it comes in, you would think that foward returns–
Tobias: It’s none. There’s no relationship. The relationship is absolute valuation.
Bill: It used to be, bro.
Tobias: Yeah, it’s a brand-new world, I don’t know.
Jake: It’s different this time.
Tobias: Even the Fed talks about the equity risk premium. It’s the weirdest thing, regularly. Show the proof there’s none.
Jake: It was not that long ago, March–
Bill: Well, [crosstalk] –data and facts.
Tobias: March was 100 years ago.
Jake: Yeah, well, that felt like it. You saw junk bonds blow out to– they got to 10%, or something.
Tobias: Yeah, close. I think so.
Jake: It wasn’t a year ago even where we saw these spreads blow out and yet, we just pretend like it could never happen again? I don’t know.
Tobias: Well, I don’t think that people are pretending it can never happen. It’s just what do you do? Right now, what do you do? You have cash, so you want to sit in cash.
Bill: Yeah, but, look, if you’re in cash, I understand the fear that they’re just going to incinerate the dollar. So, you’re holding on to something that’s going to lose value year after year after year and meanwhile, everybody’s playing a game that stocks go up. That’s the classic way that you get destroyed in making a bad decision that you don’t want to make. But there is an opportunity cost to not playing the game and to act as if there’s not [crosstalk] really be honest.
Tobias: That’s what Graham recommended, basically between 25% and 75%. 25% would seem to be very low to me, that’s a really aggressive market call, but 75% that sometimes it seems like that’s not enough. Like I think if you get a– I think about once a year, you get an opportunity to get to 75%, and then once every seven years, you should be like 100%.
Bill: In what? Cash?
Tobias: The market should be fully invested. No, other way around. Graham was saying 20– Max bearishness is 75% cash, which seems that’s a pretty aggressive bet, like it could have been max bearishness since 2010.
Jake: I’ve been very thankful that actually the ante of this game, and you keep folding the deuce seven that you’re being given, has been relatively low. Obviously, there’s probably some difference between CPI in reality but at least CPI hasn’t been like, ripping to the point where you’re like, “God, I can’t afford to fold, too many hands here.”
Tobias: If inflation really takes off, what does that do to stock prices? That doesn’t make them take off, does it? I mean, I guess so [crosstalk] made–
Jake: [crosstalk] -historically, it crashes them first, before Zimbabwe– [crosstalk]
Tobias: All right. So, you get a crash, and then hyperinflation. Well, there you go. Next big crash, all in, ride the hyperinflation to the moon.
Jake: That sounds like a great societal outcome there. Jesus.
Bill: If you define wealth as relative purchasing power, a guy like Puru got a whole lot more wealthy this year. Now, he’s got to cash out, but to forex your portfolio? I mean, there’s a huge opportunity [crosstalk] not paying that. What?
Tobias: I think he rolls in pretty regularly. I think he’s got a lot of short-term capital gains in there. I mean he’s in Singapore, so maybe doesn’t, I don’t know if it works there.
Bill: Yeah. That’s been one question that I have had about his strategy is how tax advantaged he is on a short-term basis. Because in the US, you get a lot of tax drag in that strategy. Unless you’re in an IRA, you could do that.
Japanese QE & Inflation
Tobias: This is a good question on the screen at the moment. I don’t know the answer to this. I’m just interested in thinking about it. Why hasn’t Japan seen the high inflation given they invented quantitative easing? They’ve had the zero rate since the 1990s, early– 1990. Here we are, 30 years later, the stock market’s never made it back to all-time highs. No inflation, is it a demographic thing?
Bill: Could be cultural.
Jake: That’s the argument.
Tobias: Cross-holdings. Governments never let the companies fail.
Bill: Part of it– [crosstalk]
Jake: [crosstalk] -complex systems, so to say why did this, we have this one outcome from a very complex system betrays an understanding of how complex systems work.
Bill: Russell Napier came out on Real Vision recently and said that he is now in the inflation camp, and the reason is the way that the government guaranteed PPP actually created commercial bank lending. That’s how you really have money creation and velocity increase. Whereas before, the commercial banks, which he actually agrees with me, shocking, the commercial banks weren’t actually the true source of lending, it was a lot of the alt lenders. This particular time may be different. I mean, he switched from deflation to inflation. So, it’ll be interesting to watch if he’s right.
Tobias: Yeah. ValueStockGeek points out the Japanese market got to 100 times on CAPE, which it’s about two and a half times higher than the US market ever got to in 2000. About three times higher than where we are now.
Jake: So, you’re telling me there’s a chance.
Tobias: Which is roughly where it was in 1929, by the way. I know that you sound like an idiot, that’s like mentioning Hitler in any Twitter debate. It’s expensive, and everybody’s pretty bulled up. I don’t think there are a lot of people on the other side of the boat.
Jake: [crosstalk] –how could you do short anything in this world right now?[crosstalk]
Jake: I don’t know. Oof.
Bill: You can’t. You’re out of your mind if you short.
Bill: The only thing about the expensive thing is– you do, oh, sorry. [laughs] Especially the shit you’re shorting right now. This is probably the worst time to be short what you’re short.
Tobias: It makes me feel good.
Jake: If Bill says that, I’m saying it’s the best time to be short– [crosstalk]
Tobias: Yeah, that’s what I’m feeling too.
Bill Ackman Buying Hedges
Bill: What do you mean? On a forward basis? Yeah, probably. I don’t know when it cracks. That’s the problem with shorting. The thing about shorting that is so hard and why I think Toby’s smart to have a momentum overlay on how he does it is the story’s got to crack first. You can look at a lot of this absurd stuff and say, “Oh, I’m going to go short.” I think that’s a great way to get your face ripped off. Toby, you have a momentum overlay, so that’s a smart way to implement that strategy.
Tobias: Thing is, like in March, you don’t get much notice. One way of doing it is you just go and– when the hedges get cheap, you become a value investor in the hedges. You buy your hedges when they look unusually cheap like Bill Ackman did. He’s not really prognosticating on what’s going– He’s not thinking that something is going to happen imminently. He’s just saying, “ Now’s a cheap time to put it on. So, I’ll buy some and see how it goes.” And he’s put it back on again. I don’t know what the answer is. I don’t talk to anybody now who’s not super bulled up or who’s just like, “You know what? It’s probably going to blow off.” There’s not a single person. There’s nobody on the other side of the boat. The fear and greed’s come off a little bit. Fear and greed was 64 today, so it’s not where it was a few weeks ago. A few weeks ago, it was as high as it’s been since late last year.
Jake: We’re 10% off from full panic again, though, right?
Tobias: Yeah. It seems very–[crosstalk]
Jake: [crosstalk] –so much.
Tobias: Yeah, for sure. It’s very, very reactive. If we were down to– like 10% is an unimaginable amount in this market. But, yeah, we’d be at all-time fear, extreme fear.
Jake: If you got 10%, you’re going to get 30. That’s my–
Tobias: Probably that’s right.
Jake: Just because of the reflexivity of that and how– It feels to me like there’s a lot of people all on the same side of the boat, but they’re all edging towards wanting to be on the other side of the boat and they all think that they’re going to be the one that gets there before everyone else.
Tobias: Yeah, well, that’s the plan. Everybody’s got one foot in the– what do they call it, skip?
Tobias: The lifeboat. Thank God. Yes, everybody’s got one foot in the lifeboat.
Bill: I’m not trying to be argumentative with you guys. I don’t know how true that is though, because lot of like the Motley Fool guys and the 7investing guys, what they would say is, “If the stock goes down 50% and the business is good, I’m a long-term investor. I don’t care.” I think that that’s a fine way to think.
Tobias: Buffett would say same thing.
Bill: Yeah, that’s not having one foot out the boat.
Tobias: But I’m not talking about those guys.
Bill: I’m nervous as all– get out. I’ve never been more nervous, even though I do think we probably moved in four though.
Bill: [crosstalk] -still in inning three. But I don’t know how to handicap it, but this feels frothy. That said, I’m not going to sell what are you going to do? I just think forward returns are going to suck.
Tobias: Yeah, forward returns are lower from here for sure, but that’s been true for a little while now. The market’s been defying that it doesn’t seem to matter.
$PTON’s Forward Returns
Bill: I’ll tell you what’s frustrating. You have a Peloton debate, and I’m talking about five years from now. Then something like today happens and some people tag me, it can go, why wouldn’t it double? We’re not even having the same conversation. I’m not telling you what– Sure, this acquisition works. Now, they get the manufacturing capacity. I would argue that’s already somewhat priced in that they’re going to figure out their manufacturing capacity problems.
But my whole point is, I don’t think in three years you’re going to have the same demand that you have today. I think it’s a pandemic and I think people are stuck inside with absolutely no alternative, and I love the product, and I use the product. I just think capitalizing this is a risky proposition. [crosstalk]
Tobias: That’s where I get to too. If you look at what’s the– what are you paying for the underlying business? You’re paying a lot, that’s got to go right for a long period of time for you to make any money out of this thing. There’s just easiest stuff to do. There’s lots of good–
Bill: And they got a real shot. If you believe that they can get all of their equipment into all these gyms, and then all of a sudden, you have this royalty-based stream where people are filling gyms with Peloton products and the owners don’t have to have fitness instructors, and now all of a sudden, Peloton has got all these subs and then they’re in all these hotels and then they got the–[crosstalk]
Tobias: I thought you were talking Bowflex.
Bill: No, I mean like any–
Jake: Oh, yeah.
Tobias: There’s other ones.
Bill: It is different, man. They’ve got good content and it is a community. I mean, that’s real. So, you can’t say it’s not.
Tobias: It’s not unreplicable.
Jake: The Bowflex laundry hanging service.
Bill: It’s not easy to replicate.
Short & Long Term Investors Can Both Be Right
Jake: This is a good point though. When you have people looking at different time horizons, you can both be right. If you guys seen St. Joe’s recently, I don’t have any opinions on it. There was a point where Einhorn was short St. Joe’s, and Berkowitz was long St. Joe’s. They were both right, just over different time horizons. Maybe that’s where we could do a better job of getting on the same page and saying a little bit more like, “This is good. This is bad.” That’s what the conversation is. “This is expensive.” Well, okay, maybe over the short term, it’s not that expensive. Maybe over longer term, it is. I mean, maybe you’re putting a little bit more a qualification–
Jake: –on what you’re saying. Nuance on what you’re saying will help avoid some of these stupid arguments.
Bill: Yeah. Well, what the Peloton conversation did for me is I was like, okay, I think what you guys are seeing is the retention in these cohorts. If you look at their 36-month cohorts or three years, I think they have 80% retention that implies a 15-year life. What I would argue is if you’re looking at the cohort in Peloton– [crosstalk]
Jake: Three years for a stationary bike?
Bill: Dude, let’s just assume it’s true, Jake.
Jake: All right.
Bill: Because that’s what the data says.
Jake: I’m just making sure I’m on the– [crosstalk]
Tobias: What’s the churn like? I thought there [crosstalk] bit of a churn.
Bill: Guys. Jesus. I’m trying to get to there, don’t make me say something that I’m going to regret on Christmas. Ah, so 80% retention, that’s 20% churn over three years. You divide that by– so you have five times three is your implied customer cohort life. So, that’s 15 years. Okay. The issue is those are the superfans. The people that bought Peloton three years ago are these crazy spin fanatics.
The five-month cohort in the middle of a pandemic is showing a 5% decrease. So, 95% retention, that to me implies a 10-year fade on that cohort. So, you got like a 10-year life and those people don’t have a choice. If you believe that a lot of people are moving to the sun, I haven’t really touched my bike since I’ve gotten to Florida. I don’t really want to be on it. You know why? Because it’s nice outside.
Yeah, I agree that in the middle of a pandemic when people are living in cities, and it’s super cold outside, people are signing up for Pelotons. I’m talking about what happens in four or five years. That’s the nuance of the conversation. So, I understand how you can get to an upside, it’s not a bet I’d make.
Tobias: But in all of these things you’re trying to work out, I don’t really give a shit where the stock price is in five years’ time. I’m just trying to work out where’s the business going to be in five years’ time.
Jake: There is your problem.
Tobias: That has been my problem so far.[laughter]
Tobias: That’s hard to handicap, that’s really hard to do. When I say that, embedded within that, is that for most businesses, that’s really, really hard to do. That’s too hard to do. So, you’ve got to find something that’s got a little bit of a history before you can even go and do that sort of thing. Need reasonably stable managers, you need to get an idea about what they’ve done historically, what the margins have been. That’s all really hard to do. With the newest stuff, you just don’t have enough operating history. You don’t have enough look at what their competitors are. You don’t have enough look at what management does with their investments. I mean, maybe Peloton’s doing all the right things, and everybody’s really comfortable with it. I just think you’re paying a lot of money right now.
We always gag about zero interest rates pulling [unintelligible [00:40:23] of a future. You’re paying for it as if it’s all happen now, and maybe it’s your interest rates doesn’t matter. Aren’t there easier bets out there to make?
Bill: Well, I think what the Peloton longs would say is the three of us are idiots that have missed a buyback, and they’d be right.
Jake: This is why tech should be trading at a discount to normal businesses because it’s so hard to understand what the future is going to look like.
Tobias: It depends on it, they don’t want a blanket at though, because you’ve got to be careful. There are some compound and subscription-type business in there.
Jake: I’m making generalization.
Tobias: If we’re talking high tech, if we’re talking about churning out new computer chips or new bits of hardware all the time where they’re competing on that part, that’s really, really hard. I don’t think you can project too far forward on that. But if you’re talking about Apple’s probably not in that business anymore. Can anybody really tell me what the difference between the current phone is and the one that was out like three years ago? There’s none. It’s a consumer product now.
Jake: It has like a magnet on it now, doesn’t it?
Tobias: It’s got an extra blade, so you can–
Bill: They’re going to make a lot of money on Cameo.
Tobias: So, you can shave other parts of your body.[laughter]
Bill: The car. They’ve got the car. You have the Apple Rundle. Look, I think what the Peloton people would tell you is, you’re going to have– yes, there is change these are the guys that have invented the change, now they have scale, now they’re going to buy manufacturing, now they have capital to compete, no one else is going to be able to compete with them. My gut tells me it’s a spin niche that maybe they dominate for a while and then people get tired of spin.
Tobias: The bigger issue for them– probably they’ve won spinning– [crosstalk]
Tobias: They’ve won sitting bikes at home. These things have all moved in waves and fads was the shake weight for a little while.
Bill: It’s different than a shake weight. I do think you guys somewhat underestimate the community aspect of it. It’s a good product.
Tobias: Lots of people used to like MySpace too.
Jake: There’s just a lot of community when you can’t see your friends.
Tobias: MySpace was huge. Everybody’s good friend, Tom. Where’s Tom now? He’s just living on his $700 million.
Bill: One thing that I was thinking is, the [crosstalk] gym business that was taking a lot of share was these micro gyms. Whether it’s SoulCycle or OrangeTheory, I do think people are definitely looking for an alternative to lifetime fitness and whatnot. Maybe my blind spot is at scale, Peloton may be able to offer people personal training at actually a pretty reasonable price, that could be the thing I’m not seeing. But I think that the reason that like SoulCycle and those smaller gyms work is you’re coming together as a community.
Forget about the online community that I talked about. Really knowing the people that you’re working out with, that I think is meaningful that a lot of people that choose that experience. I don’t know that you get that in Peloton because there’s so many people in every class. It’s just a leaderboard that drives you. I don’t meet up. I guess if people are meeting up a lot, I don’t know maybe, seems like a small, small segment of what’s going on.
Tobias’ Strength Program
Tobias: You don’t want to be doing cardio. You want to lift heavy. That’s what you need to do. For the amount of money that you spend on a Peloton, you get yourself a rack and 330 pounds of weights, that will be enough, some rubber bands, go nuts.
Bill: Well, I think that’s an interesting comment because a lot of people– like one thesis is people care about health more, and Peloton is a health app. Well, there’s a lot of guys that say that cardio actually isn’t all that helpful. Lifting heavy and eating right–
Tobias: I’m one of them.
Bill: Yeah. That’s right.
Tobias: There you go.
Bill: Yeah, I know. So, that’s what I’m saying. Is it really healthier? I don’t know. It’s probably good for your heart occasionally, but I’m not sure.
Tobias: A rack is the same price of Peloton. Then, you don’t have someone shouting at you while using, it’s great.
Bill: I like people shouting at me. I’ve got that part of me. I like to be told that I’m fat and weak.
Jake: By a hot chick. [laughs]
Bill: No. It’s usually by a guy who’s better looking than I’ll ever be. My old trainer used to call me Muffin Top, that was super depressing because of the way my stomach is.
Tobias: 330 pounds is not enough weight. There’s always going to be some asshole that comes in and says that.
Jake: Some A-hole, yeah.
Tobias: I’m talking on the bench, dick.[laughter]
Tobias: When I do my deads, I do sets of 25, five sets of 25 by 400 plus rubber bands.
Jake: Plus a weighted vest. [laughs]
Tobias: Everyone’s a hero behind their [laughs] own keyboard.
Jake: All right, let’s get some questions in before–
Tobias: Hit us with the questions.
Bill: It’s easy to say you lift heavy on YouTube, you loser. Get out of here. Go play with your shake weight. Merry Christmas. [laughs]
Jake: Bill froze up. But he’s making a good face, so it’s fine.
Bill: That’s a shame. I was taking a shot at somebody.
Jake: Well, they got the last laugh. All right, PC, hit us up.
Tobias: I’m still waiting for the questions–
Jake: No one cares. [laughs]
Tobias: 2020, what a wild ride. From the lows in March, to the highs of a week ago.
Jake: Highs of January to the lows of March.
Tobias: Yeah, that’s good point. A decade in one year. Plus, we’ve got COVID 2020 to look forward to.
Jake: COVID20– 2021. I don’t know how that’s–
Neel Kashkari The $700 Billion Man
Jake: You guys got any stimulus bill thoughts?
Bill: More stimi, baby.
Jake: I do find it a little interesting that we went from– seemed serious debate about what $700 billion meant in 2008 to, “Fuck it. Let’s just do $900 billion. That seems like a good number.” Then like, we’ll throw it out and we’re going to vote on 8000 pages worth of stuff in two hours. What are we doing?
Tobias: Well, Neel Kashkari has talked about how they came up with $700 billion. They asked him, they just were like, that’s a really big number. It’s not round– [crosstalk]
Jake: What’s the biggest number that we can get away with?
Tobias: What’s the biggest number you can think of? How high can you count? 700 billion.
Investing Models Last 5 Years
Tobias: So, I’ve got a good question here. Models from five years ago, what did you find your deviations were? I’ve talked about this quite a few times. Jake is always a big part of this conversation because Jake wrote this great article pointing out the distribution of the spread from the most expensive stocks to the cheapest stocks about five years ago. 2015-2016 was very, very tight.
He concluded from that, that it was the worst value opportunity set in 25 years. I took that article and I put it up on Greenbackd, which is the little blog I was running at the time. I just pointed all that stuff out, completely understood what he was saying and then just didn’t think about it beyond that for one moment. Jake @EconomPic, the other the other Jake on Twitter, was also pointing out–
Jake: [crosstalk] -we got two of us.
Tobias: –all the Morningstar style boxes were exactly the– you’re getting the same P/E for a large-cap growth as you were for small-cap value, that doesn’t make any sense. At that time, that was the very best time to be putting on a big growth, but because when the better companies are priced like the– the less good companies, you want to be in the better companies. It’s a totally different scenario now.
Jake: My mistake at that time was that I thought then that it’s very compressed, the spread, but I thought it was pretty expensive all around. It wasn’t that attractive in general, but then we went into a new world and what was big was able to keep growing at rates that are quite off of what base rates would typically indicate when you get to that size. And like that– that was a game changer for the next five years. My mental model was off there at that point.
Tobias: What if you had shorted up the value?
Jake: [chuckles] I would never do that.
Tobias: It would be hard to do. It’s psychologically extremely hard to do something like that, short up the value and get long the growth. [deep exhales]
Jake: I don’t have that kind of mental flexibility.[laughter]
Tobias: But it would have paid off pretty well. It would have been the right move.
Bill: The reason the spread matters is– other than the fact that economic growth should be worth a lot more is like let’s talk about some of these companies that are a 2% free cash flow grower or 2% free cash flow yield. If you’re getting 8 off something, that 2% has got a double twice, 2, 4, 8. How many years does that take? You get an 8% today in the interim. If you are underwriting the true cash flow back to yourself or the business owner, which I think is somewhat what you were talking about, Toby, when you said, if you’re underwriting cash flow rather than putting a multiple on these things, out of the gate cash flow, it matters. Now, you’ve just got to acknowledge that usually you’re going down into some hairy story for that. Which ones are you willing to go down for?
Then, you got reinvestment rate risk. If I get 8% today, I’ve got to do something with that. If the market’s up 30%, does my 8% today really help me? Maybe not but can’t go up 30% for every year ever. Or can it?
Tobias: It depends how much money you print, I guess, in relative terms. What do we do if value keeps on sucking for the next decade as it has for the last decade?
Bill: I don’t know. My rants will get even more mean.[laughter]
Jake: Yeah. I’m going to join you. This is going to be a really bitter podcast.
Bill: I didn’t think I was that ranty.
The Future For Value Investing
Tobias: It’s a good one for you, Jake. What do we do if value sucks for the next 10 years? Keep the number for that truck driving school.
Jake: Yeah, here’s the thing. I’m sure I will regret these words later. I think you’ve already gotten most of your returns for the next 10 years, if you’re an index investor, if you’re towards the growthier end. In those sideways, choppy markets, I think value tends to do okay there. Value did pretty good in Japan if you paid attention to when you were buying at multiple different periods. I would say value has a really good shot. What I’m going to say is that if anyone has a shot at it for the next 10 years, it’s value. Maybe no one does, I am willing to concede that, that maybe everything might suck for the next 10 years, potentially. But who knows? Don’t ask me, I’ve been wrong for–
Tobias: You’ve been wrong for decade. [laughs]
Jake: Yeah, no one should be listening to me. [laughs]
The ARK Fund
Tobias: Well, I’m in the same boat. So, let me take a swing at it. I got ARK fund up on the– by the ARK fund. I hedged out with ARK. I think a lot of people are doing that. The main ARK fund is now more heavily traded than SPY. There’s more flows, all the Ark funds are in the top 100 ETFs in terms of flows, Cathie Woods running $50 billion, there’s a lot of money flowing into tech stocks.
Jake: It was 2 billion or something, what, like, at the beginning of the year? I might be off on that. I read somewhere it was just like this absolute rocket ship.
Tobias: She might have been seven at the start of the year, might have been to last year. It’s been a ridiculous ride. She’s been right. I do worry a little bit if there’s a little bit of a Janus Fund– For folks who don’t know, Janus Fund in the late 1990s was something like ARK that were getting flows and they were jamming into the same stocks, which then turned up as further returns in most stocks. It looks really good when it’s going in one direction, when it turns, it’s pretty ugly, on the other side, too. I don’t know, Cathie has been right for a long time.
I would just say this, when I look at value now, there are two things that were missing five years ago, when Jake wrote his great article. The spread is now very, very wide between the most overvalued and the most undervalued.
When I look at the undervalued stocks, if you do a back-of-the-envelope valuation of these things, you can go and look on Morningstar at the portfolios of mine that are up there and you can have a look at them on any metric, they’re better than the index and they’re better than– this took in yield growth, take your pick, cash flow earnings book, I think it would be very hard from here for value to at least deliver reasonable returns.
I don’t know how that’s going to go relative to the other stuff, but I’d back it over the other stuff. I mean, I am, so I’m talking about book to be completely clear, but I feel this is what it looks like when if you’re a value guy and you get really bombed out, this is the time to make you burn. Who knows what’s going to happen in the short term, longer term?
Jake: I would say, if you believe reversion to the mean is dead for whatever reason, then keep doing what we’ve been doing, or what’s been working. But there are so many places, so many data sets where reversion to the mean is going to be bad news for a lot of these things, whether it’s growth rates, interest rates, valuations, returns on capital.
I mean, just a million different ways that you can lose if there’s reversion to the mean with what’s been working. Other ways to win if you get reversion to the mean in the other way. If somehow, we found some new permanent place where the mean no longer– were like we’ve moved beyond means and we’re in a new world, then we’re probably going to have a rough go.
Buffett & $SNOW
Bill: Slight addendum to that, is I think it’s the pace at which it reverts to the mean because I don’t think anybody that’s buying like Snowflake who expects perpetual 180% growth. It’s just they fade it probably a little bit more aggressive. Well, dude, the first four or five years they might. I mean, they might. You got to believe things for a really long time, and I think that’s where people like the three of us disagree with people that are willing to take the shot on goal on something like Snowflake. I also think that it matters how big you have it in your portfolio. If it’s 0.5%, I could care less if it’s in your portfolio, it really doesn’t do much.
Tobias: I understand the pitch for Snowflake, it’s a SaaS creating a new cloud, and Buffett’s Berkshire has bought it. What other signs do you need to take a swing at it? That’s a pretty comprehensive list of reasons to own it.[crosstalk]
Bill: –sticky it is. I think there’s more to it than just that.
Tobias: I’ll bet you that if you asked a lot of people, that’s the full extent of the reason why they bought it from here.
Bill: Yeah, that’s probably true. I don’t think [crosstalk] going on.
Tobias: I don’t think that’s wrong. It’s got a lot of qualities that– Buffett’s bought it. I mean, that’s literally all I see all day long on Twitter is people speculating about which– Buffett’s going to buy PayPal, stuff like that. People speculating about which Buffett’s going to buy Tesla, it’s just laughable.
Jake: I would be shocked if that was actually Buffett that bought Snowflake. Come on.
Tobias: Yeah, it’s probably right.
Bill: Yeah, I think you’ve got to do your own work.
Jake: Let’s not get in the weeds of nuance of these things. [laughs]
Bill: It’s a sticky business.
Jake: It’s a good story.
Bill: I get it, whatever. Two quick things. Somebody asked me about WWE’s rights. I don’t really know. I think sports rights in general are going to be tough just because you’re in the face of cord cutting. I don’t really have a good sense of how big WWE can go direct to consumer. Then, Mike Bartlett said that, I reminded him of somebody, guess what, Mike? You remind me of, uh– No one. Okay, next.[chuckles]
Bill: Because you’re a gnat. Next. Troll me. [laughs]
Jake: Come on, Bill, you’re better than that.
Bill: [laughs] I’m just having fun. Toby’s a little nervous right now. Toby’s like–[crosstalk]
Tobias: I’m just trying to find how do I move the conversation on. I’m trying to find a question. Hit me with a good question.
Bill: Is secrecy a benefit for investing? Are there good investors that don’t feel the need to constantly talk their books? I’d say yeah, a lot.
Jake: Most of the good ones.
Tobias: Probably most, yeah.
Bill: Yeah. I’d say most of the good ones don’t do this. like Norbert Lou, that guy you can’t find. That guy is a monster.
Jake: Punch card.
Bill: Yeah. He doesn’t do interviews and stuff.
Is Twitter Mr Market?
Jake: You have three positions. You just focus on those you don’t need to get on– This is a good question to follow up. Is Twitter Mr. Market or not?
Bill: Oh, yeah. I don’t know, man. Kind of, I think it might be ahead of the market. I’m starting to think that.
Jake: That’s what Mr. Market would think. [laughs]
Tobias: There are certainly Twitter accounts that are not Mr. Market. If you’re following those Twitter accounts, then you’re doing okay. If you’re polling Twitter as a whole, I don’t know. FinTwit, I don’t know. That’s a good question. The accounts that I follow pretty closely on FinTwit, I feel they all coalesce around similar, pretty solid ideas at the same time. I think you could use it as your research team.
Bill: Yeah, I wish that there were more women. I think that part of the problem with Twitter is you just skew so heavy young male. That maybe– [crosstalk]
Tobias: There are more accounts that identify as female than there are actual female users of the accounts, I think.
Bill: This is true. Yes, there are some imposters out there.
Jake: We need some academics to do some actual real research on this about ideas in the FinTwit. Is there signal there or not?
Bill: Yeah, I don’t know.
Tobias: Well, I think Wes Gray did that. It wasn’t Twitter, it was SumZero, but I think that–
Bill: Oh, what did he find?
Tobias: I think it was Value Investors Club and SumZero, and I think he did find that they were alpha generators.
Bill: There are smart people sharing their best idea to get noticed, it makes sense.
Tobias: If you had a value bent across a whole lot of guys, you’re going to get– and there’s a variety of value in there. There’s growthy value and there’s deep value, probably. That’s probably pretty good portfolio.
Jake: So, is it more– It’s just value–[crosstalk]
Bill: The better question– Wait, before you cut us. Damn you, Toby, and your time. The better question is, did the people that pitch the ideas realize the gains?
Tobias: Well, that’s a good question.
Bill: Because that is a different skill.
Tobias: I think a lot of folks who watch this does better than they do.
Bill: That’s what I’m saying.
Tobias: And I suffer from that too, which is why I became more quantitative, but I’m going to try something. Just for fun, try something else, too.
Bill: Well, folks, Merry Christmas. I didn’t mean to be so ranty. I love you, guys. I love the fans, except for Mike Bartlett.[laughter]
Jake: Merry Christmas, everybody. Thanks for listening to these three bozos.
Tobias: Happy Holidays, folks. Happy New Year. We’ll see you in the new year. Let’s look forward to 2021 being maybe not as strong in the markets, but better for everybody personally.
Bill: Yeah, like going outside and meeting each other again or something, that would be really nice.
Tobias: See you, folks.
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