In their latest episode of the VALUE: After Hours Podcast, Bill Brewster, Jake Taylor, and Tobias Carlisle discuss:
- Alameda Promised High Returns With No Risk
- Apoptosis – Build A Kill Criteria Into Your Investments
- Tesla Would Need To Own Entire Car Market To Justify Its Valuation
- Value’s Cheap
- Buffett Index – Minus The Bad Stuff
- Michael Burry’s Latest 13F
- What’s The Right Metric To Use At Different Timepoints
- It’s Easy To See Why Buffett Loves See’s Candies
- Icahn’s GME Short
- Should You Use A Stop-Loss?
- When To Sell
- Peak Greed Fear & Greed Index
- Bob Iger Back At Disney
- Service Shrinkflation
- Unionization Coming Back
- 10:2 Currently More Inverted Than Any Other Time
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: Let’s see if we can get it over the line this time.
Jake: Does say live up in the–
Bill: I’m going to sign on to YouTube and see.
Tobias: All right. Now, we’re live.
Jake: Oh, all right.
Tobias: Ah, this is Value: After Hours. [Jake laughs] I’m Tobias Carlisle, joined as always by Bill Brewster and Jake Taylor. It’s 10:30 AM on the West Coast, 1:30 PM on the East Coast. This is take 2 for this morning we press the button and nothing happened. But I think we’re live now.
Jake: [laughs] It’s good to be live. How are you doing, fellas?
Tobias: Hey, Townsville is in the house. What’s happening?
Jake: Where’s everybody from, Toby? Give us the worldwide rundown.
Tobias: Ocean City, New Jersey. Lisbon, Portugal. Teslacrashingville, Samson. Sorry, buddy.
Jake: Whoa. Come on.
Tobias: Budapest. Budapest. Redondo, all right. Israel, Chester. Stirling, Scotland. All right.
Jake: What’s everybody’s Thanksgiving plans?
Tobias: Madrid, España.
Jake: Thanksgiving in the United States this week. I guess we should probably not be so US centric. Family– [crosstalk]
Bill: [crosstalk] wanted to not have us be US centric, they could have won wars.
Jake: [laughs] Speaking of US-centric, World Cup going on now, apparently. I don’t know. I haven’t been watching it. [laughs]
Tobias: Yeah, me neither. Sorry. Not my game. Brisneyland in the house too.
Bill: Yeah, that’s soccer, right?
Tobias: Soccer. Yeah.
Jake: Yeah. That was one of the funnier tweets about– Was it when the US dollar to the Euro changed? Went in a little bit the other way parity wise and it was like, “It’s soccer now”?[laughter]
Tobias: Who is that?
Jake: I don’t know. It’s some–[crosstalk]
Tobias: Too good.
Jake: Yeah, it’s just random tweet.
Tobias: Too good.
Jake: What do we got on tap for today? Feels like a little bit of a slow week, doesn’t it, relative to what’s been going on?
Tobias: I agree. I got one thing that I wanted to talk about it. The FTX and Sam Bankman-Fried or Alameda, whichever one it was, probably Alameda, they sent this letter out to prospective customers when they were trying to raise capital.
Jake: That’s an IOU. That’s as good as money, sir. [laughs]
Tobias: I want to read some of the lines from that. This guy has fooled quite sophisticated investors. I just want to read some of the lines from this so people can just see what it takes to fool sophisticated investors. Because I think– [crosstalk]
Jake: Apparently, [crosstalk] the latest is, what, more than $100 million worth of real estate that his parents purchased? 19 different luxury properties as professors? Mm, boy, that’s not looking so hot, is it?
Bill: I thought I heard that it was through his company, but his parents lived in Illinois. I thought that that was what I heard.
Jake: Oh, well, okay. Either way, this is not proper use of corporate funds, is it?
Tobias: He did a capital raise of $42069– [crosstalk]
Jake: If only there were clues as to the seriousness of this.
Tobias: And then he just took $300 for himself. “I wasn’t aware you weren’t allowed to do that,” I think is what he said.
Tobias: And it all went into this– There’s only one bank account. So, I don’t know. I think it’s a pretty unsophisticated fraud, honestly, from the outside. Certainly, looked that way. I had never heard of him two weeks ago or didn’t know what he did.
Jake: Unsophisticated and yet, the dollar amounts are-
Jake: -relatively large.
Jake: All right. So, I’ve got actually a piece I’m excited about. I haven’t been excited in a while for one. It is going to be on– We’re getting into cellular biology today, hence my little background is some cells fighting it out. And then, after that, we’ll tie that back in with some decision-making science.
Tobias: It looks like an ad for fruit-flavored water or something like that.
Jake: [laughs] It does. Yeah, passion fruit and pomegranate seeds?
Tobias: Moving around with some bubbles in there.
Tobias: Sounds very refreshing.
10:2 Currently More Inverted Than Any Other Time
Tobias: There’s a few other things going on. I watch the 10:3 inversion pretty closely. The 10:3 inversion doesn’t go back that– the data [unintelligible [00:04:35] side doesn’t get back that far. It only tracks back to like– I think it was 2000. It’s early 2000 or something like that. So, you can actually see what precipitated the 2000. I think that’s right. You can just see the recession called. But you can use the 10:2 to get back quite a bit further.
The 10:2 goes back to, well, pre the 1982. It’s in the 1970s some time, it starts in the 1970s. And the 10:2 is currently more inverted than at any other time going all the way– get here back to 1980– or 1978 to 1982 was the inversion. It was a four-year inversion. It was much more inverted than at any other time. So, that was a good time. Ultimately, that was a good time for stocks but it was a rough four years. [crosstalk]
Jake: Wasn’t a good time for stocks. It was a good time to be starting to accumulate. [chuckles]
Tobias: Yes, sorry. That was what I meant. Good time to invest.
Jake: It was a good time to have not owned them for the last– [laughs]
Tobias: That’s right.
Tobias and Jake: 1966.
Jake: From 1966 to 1982 is the last big long-term bear market or sideways market as Vitaliy Katsenelson would characterize it.
Jake: Well, you got to count 2000 to 2010. That’s got to be a sideways market.
Tobias: Yeah, I guess so. Have to ask Vitaliy to characterize that.
Jake: Still have to. Yeah, we’ll let Vitaliy be the arbiter of sideways markets since he wrote the book on it.
Tobias: Yes. That’s a weird one. The 10:3 has been very predictive. That’s the Cam Harvey one that’s got some research behind it. He published it in 1986. And every inversion, since then, he says it has to last for 90 days. But when I look at it, I’m not sure that it’s necessary since he published it anyway. We’re now a month into this current inversion.
Jake: Oh, we’re a third of the way to the finish line on recession?
Tobias: Six months after that is when you actually see the recession or the recession gets declared, typically.
Jake: Hmm. Now, what if he changed the definition of recession? Does that change the–? [laughs]
Tobias: No. Well, it isn’t arbitrary. To be fair, it’s sort of an arbitrary number, two quarters of negative growth when you could have that whatever small animal that is going through the boa constrictor, you can see the lump going through. It’s funny to see the other side of that. Quite a few indicators that seem to front run margins and we’ve talked about all of those– just about every single security series or commodity has had that huge ramp, and then fallen off the other side.
The ones that seem to be lagging, I guess, a housing and probably the stock market too. It hasn’t seen a full downside on the other side. But I think all of that leads to margin compression and that means the E looks stretched, if it doesn’t move, so you end up with a higher PE without any price appreciation, which probably means there’s a little more to go on this thing. I don’t know. I just intuitively think it looks a little bit expensive to be bouncing from here. But who knows?
Jake: I think that’s a fair assessment, of course. [crosstalk]
Tobias: I’ve said that a few times in the past.
Jake: Yeah, oof. [laughs]
Tobias: It still looks expensive to me.
Jake: I’ve been complaining about margins for five years now.
Tobias: What is it? What’s the argument for why margins should be high with suspended capitalism?
Bill: Well, I don’t know. I think generally, the argument that I have made in the past is that we’ve gotten to a point where there’s been so much consolidation and there’s so much– Politicians are so bought that, I think generally the idea– Look, I think margins come in here. I don’t think you can have a recession without having margins come in. But I think that on a normalized basis, I could see industry structure being a reason that margins do come in.
On the other hand, if the commodity super cycle thesis is correct, you probably do have some margin compression. But Pepsi here, prices are up, what, 8% and volume growth is up 3% and that equals 11%. revenue growth. I don’t know, if some of this commodity pressure actually leaves some of these CPG companies, margins are going to explode in those.
Tobias: Why are Pepsi sales up so much?
Bill: It’s all pricing. They’re taking price like crazy. I think that they’re starting to get pushback. I think the supermarkets are starting to say like, “You’re going too far here.”
Jake: Sugar is addictive, I think for real.
Bill: Corporations have pushed through price in a lot of ways. The other thing is I’m staying at a hotel right now. Hotels fucking suck. There is no one working anymore. The services are gone. Go to Disney parks. I don’t know, a lot of these companies, I think that they cut in 2020. They just said, “We’re not going to give you back what you used to have,” and they’re not cutting the price commensurate with that. So, [crosstalk] does a recession drive pricing down? Hopefully. [crosstalk]
Jake: Sort of like service shrinkflation happening.
Unionization Coming Back
Jake: I think the margins could be attributable to, one, returns on scale of some of these giant internet businesses that just made a ton of money and required very little capital to do so. Two, globalization allowed for corporations to lower their labor component expenses and therefore, kept margins up for them. Three, total lack of any real antitrust activity in the last 10 years. So, add all those up together and it’s– Oh, and then number four, lower the corporate tax rate in 2016. I think that we have been pretty favorable to corporations in the grand scheme of the amount of pie of economic activity that’s been created, their portion of keeping it has been pretty high relative to other points in history. And so-
Tobias: It’s a mean reverting series.
Jake: -there’s lots of ways that can go the other way, potentially, whether it’s taxes, or deglobalization or– [crosstalk]
Tobias: Guillotines. Guillotines.
Jake: Yeah, guillotines. I don’t know.
Tobias: Not fair enough to go that way.
Jake: I’d rather not as well.
Tobias: Maybe a little bit of extra unionization. There’s a little bit of that going on.
Jake: Yeah, it does seem– Although this has happened in the 1970s as well. Unionization was a much more popular topic in the 1970s and then it died for 30 years. But it seems like it’s coming back somewhat.
Tobias: I wonder if Amazon sees it? What that does to Amazon?
Bill: What? Amazon gets unionized?
Tobias: Yes. Is it already? Their shop fully unionized??
Bill: Well, I don’t know how many unions are there. There’s so much waste in that company, I think despite the books that are written. Alexa, it’s starting to get public like– [crosstalk]
Jake and Bill: $10 billion.
Bill: -a year or something.
Jake: How’s that possible?
Bill: I guess at the core of it. anything that hurts Amazon, I think hurts mom and pop 2x. Maybe the world changes, but Amazon’s cost of capital is lower. Their ability to deliver is much better. They’ve trained customers in a much better way. I just think it would be really tough to compete against them. Between them and Walmart, I don’t see how mom and pop aren’t a secular loser. But hopefully that changes, because I don’t like that outcome.
Michael Burry’s Latest 13F
Tobias: We forgot to talk about Burry’s 13F last week.
Jake: Mm, okay.
Tobias: We talked about it at the start of the show and then we didn’t get around to it and we got a few comments about that. Do you know what’s in his 13F?
Bill: Yeah, his weightings of Charter and Qurate are completely reversed and should be. [Jake laughs] It’s the wrong way to lay that bet in my opinion. I’m not on board with– Well, I shouldn’t say I’m not on board with Qurate, but it’s not where my money is. Yeah, I think turns out John Malone entities are actually pretty smart according to Mike Burry.
Tobias: He’s got 24.34%. That’s the change. Top buys. So, his portfolio– I can’t read this. read this.
Jake: 24% Qurate, 37% Geo.
Tobias: That’s the prison.
Jake: Yeah. 15% in CXW, just some– [crosstalk] Yeah, real estate related.
Jake: 7% Charter.
Tobias: CoreCivic is corrections. Corporation of America, that might be another–
Jake: I don’t know how true to reality has 13F? So, do you guys have a sense of that?
Tobias: Yeah, I agree with you. 100%.
Jake: Not foreign, necessarily. There might be shorts, there might be-
Jake: -options. I don’t know. It’s hard to really tease too much out of his and say like, “This is what the book really looks like for him.”
Bill: Yeah, and if I recall correctly, at least he used to trade on technicals. So, I don’t know. Qurate broke after earnings. So, I don’t know if it’s a current weighting. I would be much more comfortable sleeping at night with those weights reversed.
Tobias: He’s heavy into those things. Like Geo, those are big positions.
Bill: Yeah, I got to hang out with the Liberty people last week.
Jake: How was your trip?
Bill: I really liked David Rawlinson a lot. But there’s a lot of moving parts going on in that business right now. I’m not sure anyone that says that they know what’s going on actually can tell you with a high degree of certainty that that’s true. So, to put 27% of your book in it, I don’t know, that just makes me nervous.
Tobias: Yeah. Rod Alzmann says Burry tweeted, “You have no idea how short I am,” on the 15th
Tobias: That’s run– [crosstalk]
Bill: Regardless of how short he is, I just– [crosstalk]
Jake: it’s just a long something. Yeah. [laughs]
Bill: From a position sizing standpoint, it makes sense to me to lean into companies that are on strong fundamental foundations. I don’t think– [crosstalk]
Jake: Like selling cat sweaters?
Bill: Yeah, well, I would not size into something on valuation alone. Valuation would be a necessary, but insufficient condition. I think that right now with the distribution outcomes in Qurate, I don’t fully understand that weighting. But he’s smarter than I am.
Tobias: He’s a wild man.
Bill: He could be out. I really don’t know.
Icahn’s GME Short
Tobias: Yeah, here’s another one. “Icahn has a GME short?”
Bill: Yeah. Well, he should. If I had any capability to short and manage a short book, GameStop seems like a pretty easy one.
Tobias: Do you want to be short those meme stocks though?
Bill: Well, over time, you’re going to be right. I just don’t know how to manage short exposure.
Tobias: Just keep it small.
Jake: Keep it at zero. That’s how you manage it. [laughs]
Tobias: That’s exactly the right size. That’s exactly small enough.
Jake: [laughs] [crosstalk] In fairness though, I do think long-short’s going to have a good few years here. Kind of got top bombed out.
Tobias: Yeah, it tends to happen. It has that effect every now and again.
Bob Iger Back At Disney
Tobias: What about Bob Iger back at Disney?
Jake: Bill, you’re our resident media expert.
Bill: I guess it depends how you want to read it. I find it hard to believe that– I guess I’m open to being wrong on this, but to think that a company that requires one CEO to come back, it’s hard for me to get amped up about the confidence and the terminal value of that if they’re basically saying, “Bob and only Bob can lead us through this.”
Jake: How long was he gone for?
Tobias: He just bailed [crosstalk] at the start of the pandemic.
Bill: Two years. He wasn’t gone. He was undermining everything that Chapek did. All the fucking negative headlines were Iger leaked. That guy never went away. [crosstalk]
Tobias: He was just Zooming in. He didn’t want to wear a mask in the office. He was just like, “I’ll let you guys take it for a couple of years, then I’ll be back.”
Bill: Yeah. I don’t like Warner Brothers, I don’t like Paramount, I don’t like Disney. I think that they have legacy profit pools that are being completely attacked. I think that they’re misallocating capital and direct to consumer chasing a multiple that Netflix had that is now gone. I think Netflix has by far the greatest strategic positioning in the entire media sector and it’s got one focus. They don’t need any outside capital anymore. I think it’s just one big bloody knife fight. I think that Iger left, and now he’s got to come back, and I don’t know, maybe they spin off ESPN. I think Comcast is probably the cheapest combination of broadband and media in the entire industry. And I like Charter, because I don’t want to deal with any of this shit.
Jake: Does Netflix have internal cash flow from operations enough now to support all that Capex in [crosstalk] development?
Bill: Oh, yeah.
Bill: Oh, yeah.
Tobias: The Disney model, everything flows downstream from this. Every few years, they bring out a tentpole movie where they have a new Disney princess and that captures the hearts of a generation of seven-year-old girls. And then, they ride that through to whenever the next generation comes through.
Bill: Yeah, I don’t know-
Tobias: That’s a tough business model.
Bill: -if that’s true, man.
Tobias: You don’t think so?
Bill: I think that they’ve had to protect their competitive position through acquisition, not through rolling out the next inorganic film.
Jake: Like Marvel and Star Wars, you mean?
Bill: Yeah. Marvel, Star Wars, and Pixar. What’s Disney without those? All of them are required.
Tobias: I think Encanto was the last– or there have been a few since then– Honestly, I can’t keep up.
Bill: Yeah. Look, it’s a fantastic company. It’s got an advantaged business model. But it’s hard for me to look at what’s gone on and be like, “Yeah, this is positive–” [crosstalk]
Jake: Healthy culture?
Bill: Well, yeah. Let’s put it this way. At a minimum, that business is not a business that an idiot can run.
Bill: So, I think that if they’re saying, “We’ve got to bring back the one guy that we think can bring us through this current strategic predicament that we’re in,” what does that say about the franchise?
Tobias: It’s interesting to compare that. We didn’t really know who his successor was, I don’t think, until he stepped down. You compare that to Buffett at Berkshire. The two guys who are going to be Ted and Todd, they joined more than a decade ago and everybody knows that they’re going to take over the investment side of the book and probably, the other gentleman’s going to be running ops. What’s his name?
Tobias: Abel. Yeah.
Bill: Yeah, honestly, I think Disney would be better off if Iger was just honest and said, “I’m not leaving here till I die.”
Jake: Emperor for life?
Bill: Yeah. That’s Buffett.
Tobias: Buffett owns Buffett’s–
Bill: [crosstalk] I’m going to lose my mind or die before I leave.
Tobias: Buffett owns it. Buffett’s– [crosstalk]
Bill: Iger does too at this point. He is flirted with leaving for how long and then he finally left. And then he undermined the current CEO by leaking stories to the media the whole time. And now, he’s the one guy that can come back. You’re going to tell me he doesn’t own that? This is the Iger show, folks.
Tobias: But he relies on people’s votes.
Jake: Sounds like a great hero’s journey story. [laughs] It is one of my great regrets that we didn’t write up some bullshit, and get it greenlit, and sell it to Netflix in the last five years.
Jake: How many of these companies–? [laughs] Missed opportunity, boys.
Bill: Oh, we’ll see. I’d get really constructive on media generally if they would all just lean in back to the bundle and say, “This is the only way we’re going to compete.” They’re devaluing their cash cow by trying to invest in subscale direct-to-consumer products. It’s all one huge misallocation of capital, in my opinion.
Tobias: How hard is direct to consumer though really?
Tobias: Famous last words.
Tobias: How hard could it be?
Jake: We can barely get a show on once a week. [laughs]
Tobias: The technology problem, that’s been solved many, many times. You turn on your Apple TV, whatever kind of TV you got, and there’s all those little tiles there for whichever you want to watch. I spend my time in whatever, Netflix, HBO, Disney, Prime. like those. So, those guys seem to have all figured it out. There’s not– [crosstalk]
Bill: They haven’t figured out how to make money.
Jake: If you like a business, it’s a hard business. It’s easy thing to throw shit against the wall though.
Tobias: Cable has the monopoly into your home. So, they charge whatever they want for the internet, and then really whatever they want for the cable bundle, and then everybody else just feeds downstream from that. But we’re not going back to that, are we?
Jake: I don’t know. Check out Bill’s podcast that he did, this last one. It was really good.
Tobias: What’s the conclusion?
Bill: Yeah, it’s Craig.
Jake: Yeah, Craig Moffett.
Jake: After that, I listening to that, I was like, “Okay, I just need to never be on the other side of a trade from that guy.” [laughs]
Bill: Yeah, Craig’s good.
Jake: That was my takeaway.
Peak Greed Fear & Greed Index
Tobias: I was checking the fear & greed meter today. We’re back to peak greed for 2020.
Tobias: Yeah. Well, it’s greed. There’s extreme greed. We haven’t got to extreme greed. I’m just saying, as greedy in 2022 at this point as we have been at any point. Actually, when you go back and have a look at– [crosstalk]
Jake: What is that? Just like barely off of the fear one? Just like– [crosstalk] [laughs]
Tobias: No, that is greed. It’s greed. It’s like 75 or something like that out of 100.
Jake: Really? Right now?
Tobias: Yeah, I think so.
Bill: It makes sense, man. Think about where things are trading versus what might be coming. I would argue it’s pretty greedy.
Tobias: Where they were. Yeah, for sure. The Ark complex keeps on getting floored. So, people certainly haven’t been called [unintelligible 00:24:42] yet.
Tesla Would Need To Own Entire Car Market To Justify Its Valuation
Tobias: Yeah, there’s a lot of dip buyers out there. Actually, there’s some sad threads on Tesla. When I go through and have a look at those– I’m going to forget which account keeps on grabbing them, but I think Mr. Skilling, one of the Skillings or Kenny Lee, I don’t know who it is. Somebody keeps on capturing– [crosstalk] One of them keeps on capturing all of the– there’s like a Tesla owners’ group and they’ve been conditioned to buy that dip repeatedly. And now, they’re starting to ask questions about whether you borrow money to buy some more dip.
Bill: No. The answer is no. Don’t do that.
Bill: Sure, somebody’ll be like, “What do you know? You don’t know anything.” I know that it’s trading at under a 2% free cash flow yield and it’s a fucking car company. That’s what I know. Ugh.
Tobias: The problem is that when something runs up that much for that long and you conditioned to buy the dip repeatedly and you get rewarded for doing, you don’t know how to turn that behavior off when it goes the other way, and you keep on doing it, and you get destroyed. Make a lot of money on the way up and you give it all back on the way back down.
Bill: Yeah. Look, what he’s done is incredible and the financials to the extent that they’re not fraudulent are pretty impressive. But I don’t know. Man, you got to have a lot of good things happen from here.
Jake: Well, Toby, walk through that little math exercise you explained to me a couple days ago that you did on it.
Tobias: I just took the earnings and looked at what it needed to compound at, what it needed to grow at to justify the current valuation. It needed 30% a year for the next decade to justify the current valuation.
Jake: That gets you like a market rate of return, if that happens?
Tobias: That gets you a market rate of return. If it does 20% a year for the next decade, it’s 90% overvalued. I just looked at it and put in some rough assumptions what I thought would be a reasonable thing to do. It’s still being pretty optimistic and I get $30 to $60 in fair value for right now.
Jake: Per share.
Tobias: Per share.
Tobias: So, that might mean that I would want to buy it at no more than $20.
Jake: And today, it’s at–?
Tobias: $160, something like that.
Tobias: It needs to be– [crosstalk]
Jake: That 20% growth rate versus 30% growth rate is a bit of a cold water, isn’t it?
Tobias: Having said that though, it’s 50% year-on-year.
Tobias: If it keeps that kind of number, then– [crosstalk]
Jake: If only there were some base rates that could help us try to assess what are the chances of this.
Tobias: They seem to have been reasonably successful at hitting those numbers. Some of it is falling through the bottom line and it is generating free cash flow.
Bill: Look, if I were going to argue against the base rates, I’d say it’s already escaped base rates and they’ve done it without any advertising. There’s something special going on there. It’s just eventually– [crosstalk]
Tobias: Do use CAPE base rates– [crosstalk]
Bill: They’d have to own the entire car market to justify some of these numbers. Look, you know what, I like Samson. Samson is a loyal listener from day one. I hope Samson makes a ton of money on this thing. But it’s not something I’m going to make money on.
Jake: I agree.
Tobias: Do you want to do the FTX or do you want to do the cells? Do you want a palate cleanser or do you want to feel sick?
Bill: Sell Tesla.
Jake: [laughs] Let’s cleanse the palate.
Tobias: Yeah, okay. Do the cells. Good idea.
Jake: All right. I thought that was FTX. [laughs]
Tobias: That’s schadenfreude.
Apoptosis – Build A Kill Criteria Into Your Investments
Jake: Yeah, I guess. All right. Have you guys heard of the term ‘apoptosis’ before?
Tobias: All I know is that the mitochondria is the powerhouse of the cell.
Jake: Correct. And you get your mitochondria from your mother only? I don’t know if you knew that.
Tobias: Did not. Thanks, Mom.
Jake: Yeah, thanks, Mom. So, apoptosis is this biological process in multicellular organisms that’s really best described as programmed cell death. Apoptosis is ancient Greek for falling off of leaves from a tree. So, imagine basically, the decay of something. And it’s a highly regulated process within the body and it’s happening constantly. It’s happening inside each one of us right now as we speak. It’s basically like biochemical events that lead to changes within the cell that lead to its eventual death. The average adult loses between 50 and 70 billion cells each day to apoptosis. So, there’s some turnover that’s happening inside of you at all times.
There’s a couple different ways that it happens. It can be triggered through either intrinsic pathways, which are basically things inside the cell that make it happen. A cell can kill itself because it senses either cellular stress, or damaged DNA or mRNA, heat radiation, nutrient deprivation, viral infection. All these internal things that are happening that will send a trigger like, “Okay, blow this cell up.” It can also be triggered externally by what are called extrinsic pathways. The main one of that is this thing called TNF alpha. It’s a cytokine basically that’s produced by these little cells that are called macrophages, which are basically the cellular cleanup crew. They come in and eat cells that are blown up and get all the chunks of them that would maybe harm the cells that are around it, and it cleans it up. Think of it basically that TNF alpha pathway, the extrinsic pathway, basically comes in and pushes the self-destruct button on the cell from the outside. Defective apoptosis sensors are implicated in a very wide variety of diseases. If you have insufficient sensors, actually, one of the results is uncontrolled cell proliferation, which we know better as cancer. So, it’s a hugely important thing.
To zoom out a little bit, if you think about your entire body as all these cells and think about it a herd of animals, the removal of the weakest elements of the herd allows the remaining herd to move faster, have more resources available. So, the body’s always culling the weakest cells to leave a better version left over. And so, really, cell death is programmed directly into your DNA from the start at the instruction level. Before anything gets built, it already knows how it’s going to be torn down, if the right signals occur.
Now, let’s bring this back to the real world. Annie Duke has his new book out called Quit. It’s all about basically when you make decisions, how do you decide to quit or not. One of the great takeaways that she had was this thing that she called ‘kill criteria’. The kill criteria is a simple enough idea. It’s basically what events or circumstances would cause you to reverse your decision that you’re about to say yes to. So, before you say yes, you set the kill criteria so that you can know when I need to get out of this decision. You don’t then fall subject to all of these problems like sunk cost bias that can creep up when you are trying to make the decision in real time, whether it’s time to quit. You want to be like the cell that has the DNA that’s already preprogrammed with apoptosis that happens if these certain criteria are met and your decisions should be treated similarly.
For instance, maybe it would look like if you’re going to buy this thing, you would say, “I’m buying it, but if it gets up to a certain valuation, I’ll sell.” So, there’s kill criteria that’s already built in. Or, “If management repricing options or if stock-based compensation comes in over some number that I find too egregious, I’ll sell.” You could set all these criteria that would cause you to reevaluate and possibly exit a decision. And similarly, the inverse, if you decided to pass on something, you could set the kill criteria of that decision to pass. And so, basically like, “Oh, maybe I’m not going to buy this due to valuation, but if it got to this valuation that I found attractive, I would buy it.” A kill criteria for a pass.
It’s a great way to counteract your sunk costs bias and also escalation of commitment, which is something that can happen when you get into a situation. It lets you peek around the corner in a premortem way to see like, “Okay, what could go wrong here. If it starts to go wrong, I’m going to short circuit it before it turns into basically like cancer of your decision making and I’m going to cut this off and save the resources for the more healthy decisions that I’m making.” Biology has these instructions that it uses that are relatively simple in their execution, but they create this very complex and emergent behavior that leads to you and I being able to talk right now.
The nice thing too is that just because you made a decision, you could look at your entire portfolio today and you could still come up with kill criteria for everything. It’s not too late. Going through all of your names and writing out what would have to happen for you to decide to exit that particular name, you could do it even if you’ve already owned it for a decade. It’s one of those things that definitely is better late than never. You could go through your portfolio and you can actually use an intrinsic pathway like the cells, which would be holding yourself accountable. I would say that it helps a lot to write these things down and so you could keep track of them. Keeping it in your head is a very lossy and dangerous way to do it.
Or, you can use an extrinsic pathway outside the cell pushing that by having any– Duke recommends having an a quitting coach, she calls it. So, basically, someone that would hold you accountable to your kill criteria and therefore, you execute on your best intentions and you can’t lie to them as well, as much as is it’s easy to lie to yourself.
So, take a page out of nature and she’s figured out a lot of smart ways to do things and apply that to your portfolio.
Should You Use A Stop-Loss?
Tobias: I like that approach, JT. Somebody asked about a stop-loss. I think I see a paper on stop-loss orders. I can’t remember if it’s specific to value or if it’s generally. But particularly in value, stop-loss doesn’t work. You just get whipsawed out of stuff.
Jake: I would say the first order thinking of execution of kill criteria is based on price. But the even better version of it is based on corporate fundamentals, corporate actions. Those are the things you should really be looking for as the drivers of– Drivers incrementally up or detrimentally down of value that’s been created within the business and not so much using price as this chasing mechanism.
Tobias: I like the– [crosstalk]
Bill: Yeah, I guess it depends on what your strategy is. If you explicitly have momentum as part of what you’re looking for from a price perspective, then I can understand a stop-loss.
Bill: But yeah, a stop-loss is not something that I would use.
Tobias: It doesn’t help you in value, particularly, because you’re already saying this thing is trading below and I think it’s worth. Then, if the price goes down, there shouldn’t be any more information in that. It’s just more irrational than it was before. Having said that, there are lots of instances where you might not want to buy more too. I wouldn’t be making a decision while selling just purely on the price action.
Jake: I can’t say this for sure, but my gut tells me that if you are not willing to double down as it goes lower or if it was to be cut in half, then you probably shouldn’t own it at all.
Tobias: Who’s got that line? Is it Jay-Z? Someone said, “If you can’t buy it twice, you shouldn’t buy it once.”
Jake: No, I haven’t heard that.
Tobias: Something like that.
When To Sell
Bill: I don’t know. I have mixed feelings on this. I continue to think Hempton’s post is the most, [crosstalk] like probably the best posts that I’ve ever read. I just think setting– [crosstalk]
Jake: Will you remind everybody what he said?
Bill: Yeah. I’m going to mess it up but go to Bronte Capital and something about when to sell or when– doubling down. Basically, he did this study of guys that have blown up, and doubling down into levered situations is probably not a great idea. I guess the longer I do this, the more I think– [crosstalk]
Jake: The other one was– [crosstalk]
Bill: I’m down a lot on a position, I’m probably wrong as opposed to I’m probably right and the market’s wrong. I think there’s lot of nuances in that. Meta, I recently quadrupled my position. But it was small. So, it’s not huge now. But I think that the facts changed enough that– If Zuckerberg continues to spend this much for the next three years, then I got to sell this thing.
Tobias: Did you see there was a rumor this morning that Zuck was out?
Tobias: Did you see that on the Twitter? There was a rumor this morning that Zuck was going to– leak.co was the site, but it got RTed around enough that Zuck was gone and the stocks down 0.1%.
Jake: Boy, how quickly we can go from zero to hero, huh, in this–? [crosstalk]
Bill: It’s almost like price–[crosstalk] Jake.
Jake: Head back to zero.
Tobias: It’s been a funny story with Facebook though, because they launched and they fell on the face out of the gate a little bit. They traded well down off the launch, I remember. And then it traded up and he was a genius and now it’s back down and he’s a goat. He’s lowercase G-O-A-T, not that GOAT.
Jake: Yeah, a goat, not the GOAT.
Bill: I think reality is probably somewhere in between and closer to– He’s done a whole lot more than a bunch of financial analysts putting numbers in [Jake laughs] Excel sheets have ever done. So, I’ll take him.
Tobias: It turns out Australia just scored in the World Cup against France. So, this might be the only time we’re ahead of France in that game. So, Aussie, Aussie, Aussie.
Bill: I don’t know. There are some negative things said about Liberty recently. If you look at Liberty stocks, they haven’t done very well lately. If Live Nation hasn’t done well, I might argue that was the valuation issue. Formula 1, they’ve done an absolutely incredible job with. [crosstalk]
Tobias: It’s tough with it all being shut down.
Tobias: It was tough for it being shut down through COVID.
Bill: Yeah. What they’re doing, the hotel they’re developing and the race that they’re going to have in Vegas, I think from a business perspective, the value creation has been very real. I think when you look at the Braves and you look at what they did with the battery, it’s very real. I think when you look at what they’ve done with Charter, it’s very real. So, I just think that there’s these periods that stocks go through where when they’re not working, people are like, “Ah, these people need to be replaced,” or whatever. Well, our job is to pick the stocks that will work. Their job is to deliver value within the business.
Tobias: That’s a good point.
Bill: If we pick stocks that don’t work, that’s not really their problem. I don’t know.
Jake: They missed earnings. [laughs]
Bill: Now, Zuck, things are totally different.
Jake: Did they miss earnings or did all the analysts miss earnings?
Jake: I said they blame the company for missing earnings, but really, it’s the analysts who missed the earnings, right?
Bill: Yeah. I don’t know. Life happened, right? Running a business is a lot harder than a spreadsheet.
Jake: Mm, put that on a t-shirt. [chuckles]
Bill: That’ll be in the next Value: After Hours merch.
Alameda Promised High Returns With No Risk
Tobias: Do you want me to do FTX? [crosstalk]
Bill: Yeah, let’s do it. Let’s go into fraud.
Tobias: I had to block a bot.
Jake: [laughs] Oh, no.
Tobias: This is from Alameda. It doesn’t have a date on it, which is a little bit annoying, but you can get the– They say at this point in time, they’re managing over $55 million and trade $150 to $300 million a day. And so, I’m guessing that this was pretty early on. But this is the second sentence. They introduce themselves and say who they are. Then, they say, “We are the best crypto trading firm in the United States and among the most serious firms across the globe. How much can I put you guys down for so far?”
Jake: All in.
Bill: Yeah, I was going to say everything.
Jake: Is Bane doing my research for me?
Tobias: They are. Here’s the second page. The way that you could invest in them, they offer one investment product. It’s a 15% annualized fixed rate loan with no lockup, whatever that means. So, they were just basically borrowing from you at 15% and then punting it in the market.
Bill: I like to know lockup so I can ask for my money back at any time and they’re going to give me 15% fixed and I can get my money back.
Jake: This is better than a checking account.
Tobias: Sounds pretty good so far.
Bill: And you’re telling me this is a serious firm.
Jake: No risk, right?
Tobias: Here’s the killer line though. Under the heading high returns with no risk, “These loans have no downside. We guarantee full payment, the principal and interest enforceable, under US law and established by all parties’ legal counsel. We are extremely confident we will pay this amount. In the unlikely case, we lose more than 2% over a month, we will give all investors the opportunity to recall their funds and we will guarantee full repayment.”
Bill: That’s a good deal. That sounds like a great deal.
Jake: Sounds like no risk.
Tobias: Those blokes have gone to all of the most sophisticated investors-
Jake: That worked out.
Tobias: -and venture capitalists and they’ve raised hundreds of millions of dollars.
Jake: That piece of paper worked.
Tobias: I don’t know if it’s that bit of paper, but if I’d seen that you’d have to start thinking this is a fraud. I see those things all the time. People, they’ve got a currency trading strategy, “You load up the account and we’ll go blow it up for ya.”
Bill: Yeah. My head doesn’t go to fraud, but it goes to don’t give these people money.
Tobias: But you can’t make claims like that. You can’t make claims like that. It just shows you don’t understand what you’re doing. Nobody who understands what they’re doing is going to make claims like that.
Bill: Well, I guess what I don’t want to be is I don’t want to be a guy that’s I would have seen a fraud that other big firms didn’t see. But what I am certain that I am a person that would not have given them money. That I know for a fact.
Tobias: Yeah. I wouldn’t necessarily have known that was a fraud, but that’s pretty smelly that kind of language.
Tobias: And anybody making those claims, at the very least, you got to be away from it.
Bill: Mid-teen returns with no risk in a call option at the capital providers option, that’s something that I will not put myself involved in.
Jake: And it’s a trading firm. They’re trading. Crazy.
Jake: John Q. Public can stand anything except 2%.
Bill: Well, that’s the old Charlie thing, right? Back when valuations were much higher, what should you do? Reduce your expectations.
Tobias: What do think it is? Is it 15% though? It’s like, “Well, it’s a modest goal. These guys would probably do that.” They’re not saying 50%. They’re not saying 100%.
Jake: Yeah, I mean, S&P is doing 16%. They’re only offering 15%.
Tobias: I think the most annoying thing is that there were typos all the way through it. I can’t imagine how that’s though– [crosstalk]
Jake: Is that right?
Tobias: Yeah. The sentences don’t make sense.
Jake: Warren Buffett with one T? [laughs]
Tobias: I got another EV/EBIT ratio update for you.
Jake: Okay. How spread are we yet?
Tobias: We are off from the highs, which was last month. So, September 30 was as wide as it has ever been, wider than 2000, wider than 2009 at the bottom. 2000 at the peak and 2009 at the bottom, I don’t know why that is, but that’s when the spreads were widest. And so, we’re the third highest reading now. We had the second highest reading in August, then the highest reading in September, and the third highest reading in October. So, it’s closed a little bit, but still hasn’t moved at all.
There’s some research out there. Robeco have come out with some research, Matthias Hanauer– sorry if I’m mispronouncing that, but they’ve got a paper out saying that value is cheap. I RTed it into my Twitter account, if you’re interested in reading it. Same thing that everybody else is saying, AQR. Everybody agrees values cheap.
Jake: Relatively cheap
Tobias: It has been for a long time. Relatively cheap. Yeah, thank you.
Bill: Small’s cheap. That I have a fairly high degree of confidence in.
Tobias: Yeah, the smaller you go, the cheaper you get to be– [crosstalk]
Bill: Probably. But then, there’s probably some cutoff where you get into a lot of frothy shit, but I generally agree.
Buffett Index – Minus The Bad Stuff
Tobias: I think as we’ve discussed before a few podcasts ago, quality really works well in small caps just by eliminating all the bad stuff. Actually, Buffett had a suggestion like that too. He was like, “I could run an index just by eliminating the worst 15% of companies. You do so much better.”
Jake: He is the new Jack Bogle.
Tobias: Jack Bogle. That’s a good idea, actually. I don’t know, there’s probably somebody out there doing it. I don’t know what you call it. That’s the key. You have to come up with a good name for it.
Jake: Index plus.
Tobias: Index minus the bad stuff.
Bill: Yeah, I don’t know. Well, it’s not fraudy. I don’t know. I don’t know how quality it was, but you guys know Chuck Gillman. Chuck pitched me on Build-A-Bear in 2019. Look at that stock.
Jake: What’s it done?
Bill: I think it’s like a 9x.
Bill: Yeah. It didn’t look hot, but that’s how value works, right?
Tobias: What do they do though?
Tobias: You got [crosstalk] fix it.
Tobias: Better bears?
Bill: Yeah, you go in and you make stuffed animals.
Jake: Go to the mall.
Tobias: I know what it is. I’m saying how did they improve it?
Bill: I don’t know, man. I haven’t followed it. I looked at the stock the other day, I was like, “Holy shit, Chuck pitched me this three years ago.”
Tobias: Yeah. It was around. It was cheap. It was cheapish. Chuck doesn’t– [crosstalk]
Bill: Not a chance I would have held it for a 9x. Not a chance. I probably would have sold it after a 40% pop.
Tobias: That’s the problem with crypto too. I’d have sold one of those things a week after I bought them. No chance of holding through all of that.
Bill: Yeah, I bitch about selling Intrepid Potash at 10 bucks or whatever. I bought it at $8. I wouldn’t have held it for the run. No way. [crosstalk] much pain with that company.
Jake: You guys are bunch of paper hands.
Tobias: But this is the problem too, that even if you have the rule, you’re just like, “I’m never selling this thing” and it goes up a hundred times. Then, it goes back down 80% too. It’s too hot.
Bill: I’m not really paper hands though, Jake. That’s why I own cable. I actually own it. People may think I’m stupid, but I own it. That’s why I focus more on underlying businesses that I can own. Because otherwise, I’m like, “Ah, the price ran, I’m out.” I don’t know how to hold something that I think is junky but cheap. I don’t know how to hold that once it rips.
Tobias: Yeah. Buy and sell.
What’s The Right Metric To Use At Different Timepoints
Jake: Yeah. It is interesting to think about what’s the right metric to use at different timepoints for a business, especially a cyclical one. You might be able to make the argument for something like maybe oil or I don’t know, maybe some of these other highly cyclical commodity type of companies. But I kind of like the idea of buy on price to book and sell on PE.
Bill: Yeah, I can see that. So, you’re buying on balance sheet and selling on cashflow.
Bill: Yeah, I get that. I’ll tell you what, I went into Restoration Hardware the other day and I’m sure it’s going to be the best performing retail stock in the world. Man, that is some shitty shit.
Jake: Really? Like merchandises low quality?
Tobias: It’s not good.
Bill: Yeah. Walk around the showroom and look at the price that they’re charging and then find another furniture store that charges prices similar. Go, touch this stuff, pick up the samples, wave them around. The wood feels like paper.
Jake: Maybe it still needs to be restored.
Bill: Possibly. One of the bowls or one of the tables that was on the showroom, my wife was like, “Is that an optical illusion or is the thing like bowing in?” I was like, “I don’t know.”
Tobias: It’s supposed to do that.
Jake: Yeah. So nothing spills off.
Bill: Yeah. I don’t know, man. Like I said I’m sure it rips, but I just cannot get there on that business.
It’s Easy To See Why Buffett Loves See’s Candies
Tobias: I was in See’s yesterday getting some birthday presents for my wife and those prices are unbelievable. Congrats to Buffett–[crosstalk]
Jake: How much does that box of See’s cost now?
Tobias: I wasn’t looking at box– She likes the dark chocolate peanut brittle. You buy the little bag.
Tobias: The little bag is $14. I was just like, “This is–”
Jake: [laughs] It’s like $8 a bite.
Tobias: Yeah, that’s probably not far. It’s probably $2 each or something like that. $1.50 each and they’re an inch squared.
Bill: Jake, you asked the wrong question. Anyway, it’s not how much does a box of chocolate cost, it’s how much does it cost you to get a smile and a kiss from your wife.
Tobias: [laughs] There’s a lot of margin in that smile and that kiss.
Bill: Right. They’re not selling chocolate. They’re selling relationships.
Tobias: That was amazing.
Tobias: You’re getting this little cellophane bag and you got to go and buy it from– There’s not much in those stores. It’s like everything’s up against– To be fair, but it had six people working on the checkouts and I was smashed.
Tobias: Ridiculous business. Oh, my God.
Jake: They sell a lot on Christmas time too. So, it’s starting to ramp up for them.
Tobias: Yeah, this is the time. I have been in there a few times.
Jake: I think they make all their money in December, basically.
Tobias: That’s right. I’ve read that too.
Jake: All their profit, I should say.
Tobias: Why can’t you compete with See’s as a little chocolateer? Why couldn’t you just replicate that?
Jake: Nostalgia. I don’t know.
Bill: Probably can in a different geography.
Tobias: Or in a different kind of psychographic segment too. I don’t know if you’re going to charge that much money for it.
Bill: I don’t know the name off the top my head. There is a small cookie shop in Savannah, Georgia, that place is killer. I don’t know what the margins on small cookies are, but I would love to see those financials.
Tobias: Are they expensive? Do they sell them for a lot?
Bill: Fuck yeah, they are expensive. I [crosstalk] double.
Jake: How much is a cookie?
Tobias: “I’m an MBA. Here’s my strategy. I’m coming in here with jacking up the prices 2x on everything.” That’s the strategy. “Every year, I’m going to put the price up more.”
Tobias: Samson says, “Dubai and Abu Dhabi have new shops here.” See’s shops in Dubai and Abu Dhabi? Wow.
Jake: I thought that brand didn’t travel.
Tobias: Yeah. They’re a few– [crosstalk]
Bill: Fake news.
Jake: Fake news. [laughs]
Tobias: If you’re selling them for that kind of margin, you can fly them first class and you’re still going to make money.
Jake: [laughs] Yeah, they’re like iPhones practically. The value to weight ratio supposedly, that’s why an iPhone can be flown around and it makes sense.
Tobias: Do they fly the iPhones?
Jake: I think so.
Tobias: Oh, my god, that seems a bit excessive.
Jake: Well, think about the cost per pound.
Tobias: Yeah, they’re expensive. I tried to buy a 27-inch monitor Mac. They don’t sell them anymore. Surprised, but you can only get the 24-inch. Then, you go and get the super-size– [crosstalk]
Jake: Inflation. [crosstalk] three inches off.
Tobias: They’re selling the 5K Retina screen that’s like $1,600.
Jake: Just for the monitor?
Tobias: Just the monitor. And then, you’ve got to buy the computer separately. The whole thing priced out at $5,000. I got such a shock, I just shut it all down.
Jake: What? [laughs]
Tobias: So, if anybody’s got some smart ideas about a reasonably powerful good,-looking computer, let me know, because I was offended. Honestly, it was so much money.
Bill: I got a Dell at home. It’s fine.
Tobias: Oh, man, that’s a bit dirty, isn’t it?
Tobias: No, that’s probably what I need to do. I need to go that kind of way.
Bill: Yeah. If we’re moving from a world where- [crosstalk]
Jake: Dude, you’re getting a Dell. [laughs]
Bill: -policy is to tax– We were in a world where asset values were everything and cash flow generation wasn’t. Let’s say that we’re moving to a world where cash flow generation income actually matters. What do you think that does to California?
Tobias: Nobody who makes their money makes their money in California. Everybody makes it outside of California and then comes here– [crosstalk]
Bill: Not tech employees.
Tobias: Oh, the employees. Yeah. But they’re getting [crosstalk]
Jake: Real estate for sure is a question mark.
Bill: it seems like a lot of tax revenue is at risk.
Tobias: California had a surplus this year or maybe has had a few.
Jake: I think some tiny percentage of people pay basically all of the state tax in California. So, yeah.
Bill: That’s going to be interesting to watch.
Jake: Those people aren’t grinding 9 to 5 jobs. That’s not how they got wealthy. So, if you remove that financial mark to market wealth, yeah, I could see that being pretty impactful for– [crosstalk]
Tobias: California has always been a bit of boom bust, doesn’t it? It does really well when times are good and it does equally better [crosstalk] in times of bad.
Bill: I know Florida. I don’t know about Cali. Nice thing about California is it’s got a diversified economy for the most part. I don’t know. It’d be interesting to see whether or not the last 10 years has enabled policy that maybe isn’t sustainable.
Tobias: Well, a lot of California revenue comes from– [crosstalk]
Jake: 100%. How much can you borrow too at no cost?
Tobias: I’d say there’s a big hangover coming for everybody from this party and I don’t see why the hangover wouldn’t be as big as the party.
Bill: So, why the fuck do we own equities?
Tobias: Well, yeah, that’s a fair question.
Bill: I think the three of us all agree on this.
Tobias: But you can get stuff that’s just objectively cheap.
Bill: Yeah. That’s the answer. You got to have something that doesn’t have to grow that you’re comfortable owning, I think.
Tobias: Reasonable cash flows. I would be asking the questions that whoever– Was it Todd and Buffett we’re talking about it? 90% confidence interval for the excess growth.
Is The Boring 20s Thesis The Way To Win?
Jake: This is the boring 20s thesis. It ain’t going to be top line growth. It’s going to be reasonably okay business that keeps its revenue at a level that it’s profitable and it retires shares. And that might be the way that you win.
Bill: Yeah. My buddy, Francisco, is way smarter than I am. He sent me an email on Formula 1. That’s an interesting entity that I can see growing but for some economic catastrophe. I think it’s trading at 20 times free cash, which is definitely not cheap. But I don’t know, that’s a unique asset. I can see a long growth that’s a not necessarily correlated to the economy. Though if everything takes a shit, hard to see it grown through that.
We Have Ideal Conditions For Value
Tobias: I think these are ideal conditions for value. I know I sound like I’ve got mono kind of mania when it comes to value. But I think it is the case that value has always done well out of higher inflation, lower prices, better managers who can turn cash flow into stock buybacks and other things like that. This is a time for people who are better manager– better capital allocators will do better through periods like this and they’ll be fewer– [crosstalk]
Jake: Lots of visionaries, more capital allocators, more operators.
Bil: I’d buy Meta. I don’t know.
Tobias: Well, if Zuck comes to his senses at some point before– It probably doesn’t matter. There’s so much free cash flow coming in, they can probably waste it to the extent that he is and it probably doesn’t matter. But at some point, if he’s three years down the road and we don’t live in the Metaverse, then they’re probably going to switch those cash flows to buying back stock in which case we’ll probably do quite well. They are doing some buybacks.
Bill: That’s my premortem on it. If he continues down this path for three years in the face of all evidence against him, but I think a guy like that has earned the right to say, “I’m going to make my bet and I’m not going to turn my bet off, because I’m going to miss some quarterly numbers.” I get that.
Tobias: I agree with you. Probably, he has earned the right, but he’s also got the only shares that count. So, it doesn’t really matter.
Bill: But that’s always been the deal.
Jake: Yeah. You ride or die with him every time, the whole time. Didn’t matter.
Tobias: We made it, fellas. Full time.
Bill: Is this the last one of the year?
Tobias: I think we’d probably try and get one more.
Bill: We’ll be back– [crosstalk]
Tobias: Or two more. One or two more. Are you done with–?
Bill: No, I’m not done. I just didn’t know if we should update the audience.
Tobias: Yeah, I think we can get two more in.
Bill: All right.
Jake: I got a big announcement for next week.
Tobias: Oh, good. JT’s got a big announcement. So, we’ve got at least one more in. All right, dudes, this was fun.
Bill: All right, have a good one.
Tobias: Happy Thanksgiving everybody.
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