Speaker 1: Hello, and welcome to What Goes Up a Weekly markets podcast.
Speaker 1: My name is Mike Reagan, I'm a senior editor at Bloomberg,
Speaker 1: and I'm Emily Graffeo, across asset reporter at Bloomberg, filling
Speaker 1: in for Build on a Rich and this week on
Speaker 1: the show. Well, if you wanted to pick a single
Speaker 1: day of market action to serve as a microcosm for
Speaker 1: the whole year, we got it. This week, stocks, bonds,
Speaker 1: and currency markets all had a collective freak out over
Speaker 1: this stubbornly high inflation. This after August consumer price index
Speaker 1: came in a bit hotter than economists had expected, but
Speaker 1: it really highlighted what a tricky year it's been for
Speaker 1: balanced portfolios that invest in both stocks and bonds. So
Speaker 1: how are managers of those funds dealing with this year's turbulence.
Speaker 1: We'll get into with with a fund manager with a
Speaker 1: balance fund who's beating his benchmark pretty nicely this year.
Speaker 1: But first, Emily, I gotta say thank you for filling
Speaker 1: in for Vildonna, who's off again this week. Even though
Speaker 1: this is going to cause even more anxiety for Valdonna herself,
Speaker 1: I appreciate it. Yeah, no problem, you'd think, you know,
Speaker 1: she would go on that vacation and she would be
Speaker 1: more relaxed. But I'm not sure if that is the case.
Speaker 1: We'll work on it. But the only rule you have
Speaker 1: to know, Emily, the only ground rule for a co
Speaker 1: host is you have to laugh enthusiastically at my jokes,
Speaker 1: which I will absolutely and because I will add you
Speaker 1: to my professional network on LinkedIn. Yes, yes, finally, finally,
Speaker 1: because I gotta say Vldonna is not very good at
Speaker 1: that requiremental laughing at my jokes. I think it's a
Speaker 1: you know, she eats nothing but califlower. I think it's
Speaker 1: a it's a protein deficiency or some kind of vitamin deficiency.
Speaker 1: That that's the story I'm going with. Yeah, yeah, too
Speaker 1: many chickpeas, not enough meat. But one next, she's great
Speaker 1: at and she has a great journalist, and she's great
Speaker 1: at finding excellent guests for this podcast, including this week.
Speaker 1: She brought this week's guests on and then abandon us.
Speaker 1: But um, we're very excited to have them. Money tell
Speaker 1: tell the listeners who this week's guest is. So today
Speaker 1: on the show, we have George Cippolini, and he is
Speaker 1: a portfolio manager of Pen mutual asset Management, and he
Speaker 1: also co leads the management of the balanced income strategy
Speaker 1: at the firm. So, George, welcome to the show. And
Speaker 1: most exciting is you're a Philly guys. So the most
Speaker 1: important first question is you gotta give us your cheese
Speaker 1: steak place. What's your what's your favorite cheesesteake place? Okay,
Speaker 1: so I'm going to give a little bit of a
Speaker 1: nuanced answer if that's okay. It's definitely not Pats and Gino's,
Speaker 1: which a lot about out of town or tend to like,
Speaker 1: um loved love John's Rose Pork, which again in the
Speaker 1: name it says rose pork and not cheese steaks. But
Speaker 1: they make a great cheese steak. But the best sandwich
Speaker 1: in Philly, if anyone wants to go, it's in the
Speaker 1: writing Terminal market and you go to the Nicks and
Speaker 1: you get a brisket of beef sandwich. It's outrageous, it's
Speaker 1: even I mean, I think it's better than a Energies steak.
Speaker 1: That's my crest. I'll accept that answer. Actually, I you know,
Speaker 1: I've heard about that place for years and I don't
Speaker 1: think I've ever actually had The next roast beef. But good,
Speaker 1: that's some good, solid research, Philly research right there, Emily,
Speaker 1: this guy knows what he's talking about. Yeah, that sounds
Speaker 1: that sounds delicious. I think we'll have to have another
Speaker 1: episode where we just talk about brisket and yes, yes, absolutely,
Speaker 1: But George, why don't you start us off and talk
Speaker 1: a little bit about your current role um and your
Speaker 1: background and how you got to you know, where you
Speaker 1: are today at Pen Mutual. Sure, absolutely so a little
Speaker 1: bit of a different path than I think most portfolio
Speaker 1: managers in terms of getting to where I am today
Speaker 1: at Pen Mutual, which we're at a great place and
Speaker 1: we're grateful to be here. But but I grew up
Speaker 1: doing concrete work with my family in Philadelphia. UM, at
Speaker 1: around nineteen years old. I didn't take my S A
Speaker 1: T S. I didn't do any of that good stuff,
Speaker 1: no plans to go to college. Then I met my wife,
Speaker 1: who's from South Philadelphians, pretty strong willed, and and she said,
Speaker 1: you're going to go to college, and so I did.
Speaker 1: I listened and um, and you know, it was a
Speaker 1: great path for me, who ended up going to uh
Speaker 1: A junior college, transferred over to Drexel University, worked on
Speaker 1: the floor of the Philly Stock Exchange back in the
Speaker 1: late nineties. So um, really the the inception of my
Speaker 1: career was very much impactful to me, as it is
Speaker 1: to most young people in terms of I got to
Speaker 1: see an incredible boom in terms of the tech bubble
Speaker 1: and then a bust after and so that really was
Speaker 1: the inception of my career, which kind of led me
Speaker 1: to fortune. Fortunately to a small little investment shop called
Speaker 1: the Killing Group in Berwin, p A. It was at
Speaker 1: break even at the time. We got no bosses our
Speaker 1: first few years in the business um, but but eventually
Speaker 1: we grew this small little income fund called the Berwin
Speaker 1: Income Fund from about forty fifty million in assets all
Speaker 1: the way up to two and a half billion in
Speaker 1: assets u at at peak. And what we did was
Speaker 1: a little different. We were a little off the beaten
Speaker 1: beaten path in terms of our strategy. We were a
Speaker 1: small firm with twelve people, so we were very independent minded,
Speaker 1: very long term focus, traditional value investors. And what we
Speaker 1: did was our director of research, Leader Out, had this
Speaker 1: great investment process and I just kind of took it
Speaker 1: um from what he did on the equity side and
Speaker 1: applied it to the world of income and the fixed
Speaker 1: income and the high owned bonds and investment grade bonds
Speaker 1: and preferred stocks and convertible bonds, and the process really worked.
Speaker 1: It's a it's a strategy that's differentiated in terms of
Speaker 1: we are very flexible. We can invest across market caps,
Speaker 1: we can invest across the company's capital structure, and with
Speaker 1: the sole goal really of just adding value within this universe.
Speaker 1: We don't want we don't want necessarily the highest building securities.
Speaker 1: We want the companies with and securities with the best
Speaker 1: balance of risk and reward. Um in terms of that
Speaker 1: uh um, you know that whole direction. So that's a
Speaker 1: little quick and dirty. I ended up at Pen Mutual
Speaker 1: just just a few years ago. Um, you know, we
Speaker 1: sold our firm, the Killing Group, And and after taking
Speaker 1: some time off, I wanted to stay in the business
Speaker 1: and keep doing this because it really is a passion
Speaker 1: and and and I just felt like I could. I
Speaker 1: still had some uh some guests in the tank, and
Speaker 1: and and wanted to contribute somewhere And was fortunate enough
Speaker 1: to join Peen Mutual, with which has you know, a
Speaker 1: great staff of over thirty people on the investment team.
Speaker 1: They have a ton of resources manage over thirty billion
Speaker 1: in assets, the bulk of that being the insurance assets,
Speaker 1: and then the resources again from a marketing and support
Speaker 1: standpoint to start a new fund like like like our products.
Speaker 1: So I balanced income. So just really grateful to be
Speaker 1: back in it. And uh, we have a two year
Speaker 1: track record now and so far, so good. We're we're
Speaker 1: you know, very very highly ranked at the moment in
Speaker 1: terms of our morning Star category. And as you both mentioned,
Speaker 1: came right back into some really incredible and at concredible
Speaker 1: times and his dark times for sure. That that's a
Speaker 1: great backstory, George. You know, I'm glad you listen to
Speaker 1: your wife. You know, I's all when friends get married.
Speaker 1: I say. The key too's a successful marriage is you
Speaker 1: have to start off with the assumption the wife is
Speaker 1: always right. You get you gotta listen to her. That
Speaker 1: I haven't talked to many people who worked on the
Speaker 1: Philly Stock Exchange. That's interesting too. What were you like
Speaker 1: a specialist market maker? So I also worked at a
Speaker 1: specialist post for for Susquehanna, which and Mike, let me
Speaker 1: tell you something. You talk about experience, so you know,
Speaker 1: and there is as a you know, young teenager, early twenties.
Speaker 1: And and in the morning we had math class. We
Speaker 1: went to work and they paid for a lunch which
Speaker 1: was awesome, breakfast in lunch Susquehanna is a great shop.
Speaker 1: And then um, and right afterward we would go play poker.
Speaker 1: So I mean, if you if you just think about
Speaker 1: you know, risk rewarding, game theory and math and just
Speaker 1: the application of all that on a daily basis, that
Speaker 1: really stimulated my interest because before that I didn't know
Speaker 1: much about investing at all. And um, but that really
Speaker 1: stimulated my interest in the markets. Uh, my interest especially
Speaker 1: in risk and reward and the behavior of the markets,
Speaker 1: which I think is something that's overlooked and maybe a
Speaker 1: topic we can discuss later. But yeah, it really wasn't
Speaker 1: a great start. And and to your point, always listened
Speaker 1: to your wife, well talking about market behavior, George, what
Speaker 1: a what a crazy week? Um, But what I think
Speaker 1: is funny, you know. I one of the columns I
Speaker 1: edit is, uh, this guy Cameron Christ he writes a
Speaker 1: column called Macroman. He actually took off for a week
Speaker 1: and he came back to work the day after the
Speaker 1: CPI numbers. You know, throw everything upside down, and you know,
Speaker 1: his column was about, like, what did I miss? You know,
Speaker 1: the the equity markets actually exactly where it was before
Speaker 1: I left. Yields are exactly where they were, you know,
Speaker 1: because you had that, you had like this five percent
Speaker 1: run up in the SMP five like in the four
Speaker 1: days before to see p I report on Tuesday. So
Speaker 1: I'm curious how big of a game changer you think
Speaker 1: it was. Um, despite this this massive autility we saw afterwards,
Speaker 1: has that much much changed And you're thinking about, you know,
Speaker 1: the Fed's reaction function for the rest of this cycle.
Speaker 1: So I I think it did my get. And here's
Speaker 1: why I usually don't like short term data points. I
Speaker 1: really like long term data points. But I will say,
Speaker 1: within the context of this week, the market was very
Speaker 1: much geared up. And I don't I don't mean just
Speaker 1: the stock market, the stock market, as you mentioned, but
Speaker 1: also the bond market, even in the preferred market with
Speaker 1: longer duration securities. People were making significant bets that the
Speaker 1: CPI number was going to come in late and and
Speaker 1: the FED was going to back off. And if you
Speaker 1: think about really, for most of this year, the market
Speaker 1: has been waiting for the FED to pivot they've been
Speaker 1: waiting for Poal to give in. And I'm just going
Speaker 1: to say this one thing, and I think I sent
Speaker 1: it to you earlier, and I keep pointing to it.
Speaker 1: There was an exchange when when Pal gave testimony to
Speaker 1: the Senate and Senator Shelby asked him directly, directly back, then,
Speaker 1: is your leadership prepared to do what it takes to
Speaker 1: get inflation under control and protect price stability? And Pal
Speaker 1: gave a very respectful nod to Vulgar and then he said,
Speaker 1: I hope history will record that the answer to your
Speaker 1: question is yes, but the key thing is shall be
Speaker 1: pressed on And he said, are you prepared to do
Speaker 1: what it takes? And Pals gave a little more of
Speaker 1: a sheepish yes, but he did say yes. And I
Speaker 1: think really that's where the line of the line in
Speaker 1: the sand was and and kind of the part where
Speaker 1: the market is kind of missing in terms of the
Speaker 1: expectation that was from March and it's already September. I mean,
Speaker 1: this has been six months now, the market wanting a
Speaker 1: pivot and they're not getting it. So I think to
Speaker 1: your point, in the short term, that really was how
Speaker 1: the market was positioned Over the last month, credit spreads
Speaker 1: rallied a little bit tightened up, and the stock market rallied,
Speaker 1: And I think that's why they really want any indication
Speaker 1: that the FED can kind of shift course. George, I
Speaker 1: feel like all of this talk of are we going
Speaker 1: to have a FED pivot are we not? Has inflation peaked.
Speaker 1: It's led to a lot of near term volatility. But
Speaker 1: one of the big themes for this year is probably
Speaker 1: going to be that bonds have done so poorly, So
Speaker 1: where are you looking for that income? Is it still
Speaker 1: in any part of bonds? Is it dividend stocks? Are
Speaker 1: you looking at cash? Yeah? And and so this is
Speaker 1: this is a great point. And and our perspective, I
Speaker 1: think is a good one, not because we are brilliant
Speaker 1: investors by any stretch, but because we have this flexible
Speaker 1: approach and we are allowed to increase cash and we
Speaker 1: are allowed to wait it out. Last year, as as
Speaker 1: the markets rallied, our cash balance grew and grew up
Speaker 1: to over and so at the end of two thousand
Speaker 1: and one we had in cash over cash. And the
Speaker 1: reason was there wasn't a lot of value there. Credit
Speaker 1: spreads to Titan stock market had gripped um and and
Speaker 1: there just wasn't a lot. So so fortunately we were
Speaker 1: able to We we believe in liquidity. The liquidity is
Speaker 1: like oxygen for us, and when we have it, you know,
Speaker 1: we feel like feel great, I feel like we can breathe.
Speaker 1: And we did well last year. I mean, we were
Speaker 1: up the most ten percent, you know, not in the
Speaker 1: nine percent range, and that was a great ranking in
Speaker 1: our in our category to last year. So it's not
Speaker 1: like we missed out on much. So when the volatility
Speaker 1: kicked in for the most part this year, we had
Speaker 1: liquidity available. And yes, to your point, around the June
Speaker 1: time frame when things really blew out from a spread standpoint,
Speaker 1: we did put some money to work and I'd like
Speaker 1: to talk you know, and I'm sure we'll talk about
Speaker 1: what we bought, uh specifically, not specific names, been in general,
Speaker 1: but just to your point that this market is very,
Speaker 1: very different. So the last eight times that the SMP
Speaker 1: was down in a calendar year, bonds finished up and
Speaker 1: so it cushioned the blow for everybody, and it was,
Speaker 1: you know, diversifier, and we haven't had that to share,
Speaker 1: as you well know. And now bonds are down a
Speaker 1: lot and and this could be the worst year in
Speaker 1: recent history for sure, maybe in many many decades that
Speaker 1: that bonds have been down this much, and that's really different.
Speaker 1: So that correlation rising between stocks and bonds and the
Speaker 1: down market was something that we didn't know that that
Speaker 1: would happen. And that's not why we went to cash.
Speaker 1: But we were glad that we had the cash. And again,
Speaker 1: bonds were so overpriced if you look back now and
Speaker 1: if you look at the yields you can get today
Speaker 1: versus just six months ago. So we're glad that we
Speaker 1: had that flexible process. Yeah, that's a pretty high cash level.
Speaker 1: Said now, George, I'm famous around here for asking like
Speaker 1: twelve part questions. So so I got bad news for you.
Speaker 1: I got one coming for you. Do you have like
Speaker 1: an assistant who can take notes notes on this question?
Speaker 1: I can do it on my own assistant. Let's go,
Speaker 1: But I I'll make it easy for you. I'm just
Speaker 1: gonna I'll just monologue a little bit like here, like
Speaker 1: a villain in a movie, and then you you tell
Speaker 1: me where I'm where I'm wrong, and and what your
Speaker 1: reaction is to what I'm gonna say. Because I'm kind
Speaker 1: of fascinated you know, as you say you you're fund
Speaker 1: you can go your strategy, UH can go as much
Speaker 1: as equities. Looking on your website, you're in a little
Speaker 1: less than thirty percent as of the end of June.
Speaker 1: So not quite bullish on equities, it would seem, um,
Speaker 1: but while fifty one point seven percent in high yield
Speaker 1: corporate credit um And to me, I think that's fascinating.
Speaker 1: We don't have a lot of credit guyes on the
Speaker 1: show as much as we should, so I want to
Speaker 1: sort of unpack what the credit markets are signaling right
Speaker 1: now because um, you know, for equity investors, they often
Speaker 1: look at the high yield market especially it's sort of
Speaker 1: that canary in the coal mine. You know, spreads started
Speaker 1: blowing out before the market top in oh seven, They started,
Speaker 1: you know, creeping higher before the dot com UH bust
Speaker 1: in two thousand. I'm looking this year and at least
Speaker 1: according our index UH, you know, the spread on high
Speaker 1: yield UH corporates right now, according in the Bloomberg indexes,
Speaker 1: I think it's like four hundred and fifty basis points.
Speaker 1: And for listeners who don't know what that means, that's
Speaker 1: basically just the the extra yield on high old bonds
Speaker 1: compared to treasuries. So so, George, to me, that doesn't
Speaker 1: seem like a canary in the coal mine screaming recession
Speaker 1: just yet. You know, the spreads are why a lot
Speaker 1: wider than where they started the year, but they were
Speaker 1: very tight to start the year. So I'm curious, just
Speaker 1: you know, a you know, what are the spreads telling
Speaker 1: you as far as like a macro signal about a
Speaker 1: recession that that investors in other asset classes, uh should
Speaker 1: should be thinking about. But also, you know, the last
Speaker 1: time spreads blew out, it was it was mostly that
Speaker 1: energy sector, uh, that was the driver of that. So
Speaker 1: is that is that signal from the credit markets you
Speaker 1: think broken? Since energy companies um are a big component
Speaker 1: of high yield what they're they're doing really well these days. Wow.
Speaker 1: Excellent question. Many points, and they're all court discussing for sure.
Speaker 1: So so number one, real quick, I think it is
Speaker 1: it's a little misleading when we look at our high
Speaker 1: yield exposure in our strategy. And and the only reason
Speaker 1: why I'll say that is that we generally tend to
Speaker 1: focus on double being single B security, so we really
Speaker 1: don't delve too far down in the triple seas and
Speaker 1: that you know higher of high yield. The second thing
Speaker 1: is our duration is a lot shorter than many of
Speaker 1: the benchmarks. And then the third there is a little
Speaker 1: bit of a cheat code in the in the bond market,
Speaker 1: and and and a great way to add value, especially
Speaker 1: in these types of markets, and so checodes where I
Speaker 1: have a fourteen year old son, so I might throw
Speaker 1: out some like chicoads words or made like they have
Speaker 1: all this yeah yeah, yeah exactly and so so so
Speaker 1: the cheat code in the bond market for me and
Speaker 1: for our strategy is, look, you can find companies, so
Speaker 1: so working you limit risk or working you lower risk
Speaker 1: in a high yield security, Well, you can find certain
Speaker 1: smaller securities because we're we're a small fund at the moment,
Speaker 1: and we can buy these smaller securities, um smaller issues,
Speaker 1: and you can find companies that more cash than debt
Speaker 1: on the balance sheet. That is the ch code. So
Speaker 1: when I go to bed at night, I'm not worried
Speaker 1: about the great majority of the high yield quote unquote
Speaker 1: bonds and our portfolio going bankrupt. I'm not really taking
Speaker 1: a huge bet. I'm getting paid for that extra credit spread.
Speaker 1: But I'm not making a huge bet like the economy
Speaker 1: has to do well. I literally can go to sleep
Speaker 1: at night and I know, for example, that the great
Speaker 1: majority of our bonds are going to get paid off
Speaker 1: because because the cash is already on the balance sheet,
Speaker 1: they're managed by companies that are free cash flow positive
Speaker 1: and manage my management teams that have a great track
Speaker 1: record of capital allocation. And so that's the ultimate margin
Speaker 1: of safety for us. And the good thing there is
Speaker 1: that you know, as Ben Graham said, the purpose of
Speaker 1: the margin of safety is to render the forecast unnecessary,
Speaker 1: and so I don't have to project inflation rates or
Speaker 1: where the where interest rates are going, or what the
Speaker 1: economy is going to do. If you focus on that
Speaker 1: company being able to pay off that piece of debt again,
Speaker 1: you have you eliminate a lot of other concerns. So
Speaker 1: that's one of the cheat codes that we use and
Speaker 1: one of the ways that we've had value over the
Speaker 1: past twenty years of managing this type of strategy. To
Speaker 1: your point, yes, credit credit spreads are absolutely a signal.
Speaker 1: It's something we should all watch out for. I'll give
Speaker 1: you two schools of thought here. Number one, credit spreads
Speaker 1: or wider they should be. Uh. The economic situation, broadly
Speaker 1: speaking from an earning standpoint is a lot more uncertain
Speaker 1: today than it's been in a long time, and so
Speaker 1: credit spreads should be wider now. The flip side of
Speaker 1: that argument is that interest rates were so low for
Speaker 1: so long that many or most companies were able to
Speaker 1: refi it really really low rates, and they extended their debt.
Speaker 1: That balances out. That's good in the near term, so
Speaker 1: I wouldn't expect to see default rates kick up a
Speaker 1: lot in the immediate near term. That said, there are
Speaker 1: a lot of zombie companies, companies that cannot cover their
Speaker 1: interest expense through operating earnings or EVA don that's that
Speaker 1: to me again means that you really need to be
Speaker 1: a good like I would never buy high yield broadly.
Speaker 1: I wouldn't look I'm biased, right, I'm an active manager.
Speaker 1: I wouldn't buy a high yield e t F for
Speaker 1: the sole purpose of I don't trust all the companies
Speaker 1: that are in the e t F. I trust this
Speaker 1: company instead of that company. So that's my view, and
Speaker 1: I feel like we can ferret out and find value
Speaker 1: in that context. Um, but that's just two schools of thought, yes,
Speaker 1: I still think credit spreads are very important indicator. Energy
Speaker 1: is a big part in near point going back to
Speaker 1: fourteen fifteen sixteen, they blew up a lot of the
Speaker 1: energy credits and went bankrupt and and and that's honestly
Speaker 1: been one of the reasons why why that sector has
Speaker 1: kind of stayed so cheap, given how well they've performed
Speaker 1: um this year. So those were just my thoughts on
Speaker 1: those topics. So it's give maybe to dig in further.
Speaker 1: Let me know I I did. I also want to
Speaker 1: ask you, you know when and I know you said,
Speaker 1: you know it's you're not gonna go out on a
Speaker 1: limb and try to predict inflation or pick the path
Speaker 1: of interest rates. But fingers crossed. I think we all
Speaker 1: have to kind of hope that maybe the peaks in
Speaker 1: for inflation at least and if if you're looking out
Speaker 1: over five ten years, you know, uh again fingers crossed.
Speaker 1: But boy, you gotta assume inflation, inflation is gonna come down,
Speaker 1: interest rates are gonna come down with it. So does
Speaker 1: this type of moment in time make you, um, sort
Speaker 1: of bullish on on longer maturities, you know, especially with
Speaker 1: new issues. If if you can lock in a really
Speaker 1: attractive rate for you know, twelve fifteen years. You know,
Speaker 1: does it change your thinking on maturities at all when
Speaker 1: when yields are this high, it's it certainly should so.
Speaker 1: So the way we view it is, obviously we're getting
Speaker 1: paid a lot more now than we were just and
Speaker 1: full of months ago for just about every flavor of
Speaker 1: of income, which is which is great. I think Intel's
Speaker 1: dividend just hit five percent today. For example, Um, if
Speaker 1: you look at short rates, money market rates are going
Speaker 1: to pay about four percent soon. And you know, so
Speaker 1: if you you look at the two year you name
Speaker 1: it across the board. So so to your point, like, yes,
Speaker 1: longer duration. Now, the thing with longer duration bonds is
Speaker 1: that the YO curve is flattening, so those rates are
Speaker 1: not up as much as shorter term rates. Um. So
Speaker 1: that's something that we factor into as well. So the
Speaker 1: way I look at it is what can I get
Speaker 1: for how much risk do I have to assume for
Speaker 1: a certain level of income? And now if I can
Speaker 1: get four or five or six percent from a two
Speaker 1: year convertible bond that's busted, that has a great balance sheet,
Speaker 1: you know, that really might be my my bar. So
Speaker 1: so my low end bar or my my my. The
Speaker 1: basis for our fund is really okay, what can I
Speaker 1: get for free? And for free? It's not everyone's definition
Speaker 1: of free. This is a typical Philly guy. By the way, Emily,
Speaker 1: this is how Philly guys think. Who's got the free
Speaker 1: who's got the free fries with the cheese steak or
Speaker 1: the free drink. I I know exactly where he's coming from.
Speaker 1: Their budget friendly. I like that. Yeah, yeah, absolutely, And
Speaker 1: so if you met my father, you would certainly understand
Speaker 1: he still has his lunch money from grade school, you know.
Speaker 1: But that's that's the context. Seriously, though, it's funny because
Speaker 1: I think about this a lot, like this is actually
Speaker 1: a pretty good point. So I grew up really close
Speaker 1: with my grandparents. I would go to do concrete work
Speaker 1: with my grandfather. I'd go home, I have dinner with
Speaker 1: my parents and my grandparents. And my grandmom was so
Speaker 1: stigmatized and her whole family was by the Great Depression,
Speaker 1: and that that really left the mark, Like you did
Speaker 1: not waste a piece of food in the half like
Speaker 1: that was like, you know, that was immortal sin. And
Speaker 1: I would have to go to confession if I didn't
Speaker 1: need all my dinner. You know, my dad had a big,
Speaker 1: big beer belly, and he used to he passed away,
Speaker 1: but he used to called out his savings account. You know,
Speaker 1: that's what he's going to live live off off if
Speaker 1: things got lean. But you're right, he never never left
Speaker 1: a single crumb on a on a plate ever. No, absolutely,
Speaker 1: And so so you wonder like why you think a
Speaker 1: certain way or you know why your behavior or why
Speaker 1: your decision making processes a certain way. And that, honestly
Speaker 1: what was was a big part of it. That's why
Speaker 1: my bias is what it is. So so I'm constantly
Speaker 1: looking for for what can I get without taking any risk?
Speaker 1: And so I start with really good balance sheets and
Speaker 1: and and we really focus in on that for this
Speaker 1: product of course, and um, and again we're what can
Speaker 1: I where can I get the most amount of risk?
Speaker 1: If a two year bond from a convertible, you know
Speaker 1: that's a convertible security is going to give me four
Speaker 1: or five and I have up the upside that convertible,
Speaker 1: that optionality that a convertible bond gives us. Wow, I
Speaker 1: would much rather have that risk reward A semest asymmetrically
Speaker 1: positive risk reward profile versus you know, maybe a dollar
Speaker 1: preferred that shielding five and equivalent yield. But to your point, yes,
Speaker 1: at some point it will make sense to go a
Speaker 1: little longer. And we found certain securities. Okay, one more
Speaker 1: cheat coats. I got one more cheat coats. Words. So
Speaker 1: when you look at so we we tend to only
Speaker 1: buy bonds that are trading at a discount, which is weird,
Speaker 1: but if you think about it makes a lot of sense.
Speaker 1: So when bonds were overvalued, we weren't paying one ten.
Speaker 1: We just wouldn't do it. So what we do is
Speaker 1: wait until they become discounted. Now to your point, Michael,
Speaker 1: some of the long bonds are trading at sixty seventy
Speaker 1: cents on the dollar. For companies there are with outrageous
Speaker 1: balance sheets, outrageous balance sheets, good balance sheets that you
Speaker 1: know the one I can't tell you the name, but
Speaker 1: the company is fourteen billion in cash with less than
Speaker 1: two billion in death. And sure I'll go along in
Speaker 1: that name because I know that that balance sheet is
Speaker 1: rock solid and and and the yields great. And then
Speaker 1: the cheat code is if you can find um bonds
Speaker 1: or we only buy bonds. We tried only buy bonds
Speaker 1: that have change of control provisions in the indenture and
Speaker 1: in the in the perspectives and the covenants. And if
Speaker 1: you do that, and let's just say that company gets
Speaker 1: bought out, you're getting one oh one on that bond.
Speaker 1: And so there's another way where you can add a
Speaker 1: lot of value. And you may only have one of
Speaker 1: those every couple of years or five years maybe. But
Speaker 1: but again, the same thing with the convertible thing. If
Speaker 1: if you have a convert where the stock takes off
Speaker 1: and they do really well, I mean we've purchased some
Speaker 1: bounds twenty five dollars and sold in the two fifty.
Speaker 1: I mean that, so again we're looking at but we
Speaker 1: are to go back to the point of being cheap.
Speaker 1: We don't want to pay for that obviously. We want
Speaker 1: to wait till the market gets busted. And it's pretty
Speaker 1: busted at the moment. So that's how hopefully that helps
Speaker 1: you in terms of how we frame those types of
Speaker 1: decisions on the equity side. How are you thinking about
Speaker 1: margin pressure as inflation remains hot. I feel like there's
Speaker 1: a lot of stories that I write about people talking
Speaker 1: about how the Fed's reaction to hot inflation is going
Speaker 1: to hurt stock prices. But what about earnings? Is that
Speaker 1: the next shoot at fall for Yeah, and a great, great,
Speaker 1: great question. And I'll tell you why, because you know,
Speaker 1: if you think of what we just went through, and
Speaker 1: so so if we just ask ourselves, why is this
Speaker 1: environment so difficult? Why is it so different? Well, we
Speaker 1: go through COVID, and you know, if you think about
Speaker 1: how much money the government pumped into the pumped into
Speaker 1: the economy, and how much liquidity and how easy the
Speaker 1: FED was over that period, it obscured a lot of
Speaker 1: the traditional data. And I think that's that's part of
Speaker 1: the problem now, is that you really cannot separate the
Speaker 1: FEDS bailing out of the market over the last twenty
Speaker 1: years versus you know, the surge and the money supply
Speaker 1: over the last since COVID and the result. So let's
Speaker 1: talk about the result first. The result was earnings went crazy.
Speaker 1: Sales sales went nuts for for most companies. And if
Speaker 1: you look at some of the you know, if you
Speaker 1: look at your d S four screen on Bloomberg, just
Speaker 1: to get Bloomberg a little plug you and see the
Speaker 1: quarter over, Yeah, you can give that. You can see
Speaker 1: the quarter of well, we'll allow that, George will allow
Speaker 1: the Bloomberg plug. Okay, cool, cool, awesome. Um. So, so
Speaker 1: you can see the year over a year, quarter of
Speaker 1: a quarter results and you see these spectacular numbers in
Speaker 1: two thousand twenty one. The problem now is that is
Speaker 1: that sustainable? And my question, my argument, and to answer
Speaker 1: your question, is that a lot of it is not
Speaker 1: so so on so what we've seen so far in
Speaker 1: terms of decline was almost all pe declined so far.
Speaker 1: The problem, the problematic thing about the market is if
Speaker 1: that he declines from here, which I think there's a
Speaker 1: good chance for a lot of companies that will, and
Speaker 1: so that could lead to a longer period of either
Speaker 1: going sideways for going down. And I keep saying this
Speaker 1: line over and over. I can see the ceiling clearly.
Speaker 1: We can see peak earnings clearly, because it's there in
Speaker 1: two thousand twenty one. What we can't see at the
Speaker 1: moment is the floor. And that's partially the scary part
Speaker 1: because to your point, margins are under pressure. If you
Speaker 1: look at sales, sales had peaked and and now we're
Speaker 1: coming off peak. So what does that mean? And so
Speaker 1: you have you know, a group of factors that lead
Speaker 1: me to be concerned about the E at this point.
Speaker 1: And that's where I think we are. And then just
Speaker 1: to take that one step further, everybody talks in aggregate
Speaker 1: about the E about the SMPS earnings, and we really
Speaker 1: don't because we look at and you know, we look
Speaker 1: at company by company, and so we want companies that
Speaker 1: have sustainable earnings. But if you strip out the energy
Speaker 1: sector from you know, last quarters earnings, last quarters earnings
Speaker 1: were negative, d earnings growth was negative, sorry, darrings growth
Speaker 1: was negative, and and so you know, I think that's
Speaker 1: really important you strip that out, if you tend if
Speaker 1: you want to strip out the Apples and Microsofts of
Speaker 1: the world, and you leave you know the other you know,
Speaker 1: four hundred plus companies. This earning season really was not
Speaker 1: that good. And I think that's that's you know, the
Speaker 1: other part that the market is kind of kind of
Speaker 1: resisting at the moment, you know, Church when I look
Speaker 1: at sort of the market reaction. Uh. Ever, since you know,
Speaker 1: the worst days of COVID even um, you know, and
Speaker 1: and coming into this year, we had this a few
Speaker 1: months there where the value factor was just totally outperforming growth. UM.
Speaker 1: Then it kind of reversed back, uh and and growth
Speaker 1: started out performing value again. Now it's you know, I'm
Speaker 1: guessing it's gonna swing back the other way now that
Speaker 1: inflation is less and longer than everyone expected. But to me,
Speaker 1: you know, if you look at it from sort of
Speaker 1: thirty thousand feet, I feel like investors are just craving
Speaker 1: to get back to that world they're familiar with, that
Speaker 1: that nice, juicy bull market between the financial crisis and
Speaker 1: COVID where you know, sure GDP growth wasn't rate, but
Speaker 1: interest rates were low, uh and growth stocks were just
Speaker 1: the only game in town. I wonder if we're all
Speaker 1: in for reckoning that those days are aren't coming back,
Speaker 1: That we're in a whole new paradigm now. And it's
Speaker 1: a very uncomfortable situation to try to wrap your head around.
Speaker 1: How how are you thinking about that sort of reversion
Speaker 1: to normalcy? Um? You know, is it? Do you think
Speaker 1: we'll ever get back to that scenario where, you know,
Speaker 1: the that decade of of just a roaring bullmarket and
Speaker 1: low yields? Or are we are we stuck in a
Speaker 1: new sort of secular environment here? Yeah, and and and
Speaker 1: this this is an important topic mainly because of again
Speaker 1: what's going on in the last few years, So what
Speaker 1: really drove it? You know, I tend to believe that
Speaker 1: the FED obviously say so if you think about Druck
Speaker 1: and Miller's combat regarding liquidity, that liquidity means everything. And
Speaker 1: he doesn't even believe necessarily that it's as important as earnings,
Speaker 1: to which I would kind of debate with him a
Speaker 1: little bit. But anyway, he's a much better investor than
Speaker 1: I am. But liquidity is if you can get him
Speaker 1: on the show, you can debate him, you can you. Yeah,
Speaker 1: he seems like maybe if we all from a cheese
Speaker 1: steak or the Nix brisket of beef sand which we
Speaker 1: can uh, we can get them down here. Um. But anyway,
Speaker 1: so so so if you think about if you think
Speaker 1: about those periods, there's boom and bust and again, you know,
Speaker 1: start off my career in one. You know, we saw
Speaker 1: one in the housing bubble, and then we saw one
Speaker 1: now and you know, the FED really played a pretty
Speaker 1: big role and where they played the role as again
Speaker 1: on the pea side, on the valuation side, excess liquidity
Speaker 1: finds its way into the craziest of assets and we
Speaker 1: and we saw that. So we saw the cryptos rally
Speaker 1: and the spacks rally and the meme stocks rally. All
Speaker 1: of that, my opinion, was malinvestment that was caused by
Speaker 1: excess liquidity. There was just too much money floating around,
Speaker 1: not enough good places to put it. And most of
Speaker 1: the people who are investing that those funds were the
Speaker 1: first time invests or novice investors, and and it just
Speaker 1: again that that's not healthy. So from my standpoint of
Speaker 1: being this value investor with traditional philosophies, that was not
Speaker 1: that to me, that's the anomaly. That's that's the period.
Speaker 1: That's the tech bubble, you know, and that's the tech
Speaker 1: bubble that came back, and it will come back again.
Speaker 1: To your point, it might take another twenty years. But yeah,
Speaker 1: I don't think in terms of what growth investors are
Speaker 1: looking for, they anchored. So so the behavioral aspect, our
Speaker 1: definition of that is anchoring and their anchor to a
Speaker 1: point um or to a spot in the market that
Speaker 1: just is no longer there. And I think I say
Speaker 1: this all the time. We can't anchor, you know, take
Speaker 1: into account new information and and you know, let's change
Speaker 1: our decision, you know, change change your mind change or decision,
Speaker 1: and I think that's important for the market to understand.
Speaker 1: Today you can't anchor to that point because that's gone.
Speaker 1: I don't think again everybody wants a FED pivot, But
Speaker 1: I don't think that type of excess liquidity is going
Speaker 1: to enter the market anytime soon, not until we see
Speaker 1: some more demand destruction, you know, maybe declines in earnings,
Speaker 1: you know, maybe some future declines in in in those stocks.
Speaker 1: And and you see investors obviously like Cathy Woods and
Speaker 1: you know, talk down, you know, they really want the
Speaker 1: FED to kind of back off her and Elon Musk,
Speaker 1: and it's you know, they both have growth backgrounds. They
Speaker 1: want to fed the pivot um to kind of give
Speaker 1: that fuel back into the growth stocks. But ultimately, I
Speaker 1: think what this has done today is it's prioritized, it's moved,
Speaker 1: its shifted the priority from liquidity down to earnings. And
Speaker 1: there's always that tuggle war there in my opinion, And
Speaker 1: so right now you're earnings better be good, and if not,
Speaker 1: there's no safety net. Now there's no safety net of
Speaker 1: liquidity that's gonna levitate your stock. At a certain level,
Speaker 1: your stock will go down. And we're seeing it today
Speaker 1: with a lot of commodity companies that are starting to
Speaker 1: pre announce um, you know, and I can mention because
Speaker 1: we don't know it, but like New Corporate announced today
Speaker 1: and Eastern and Chemical yesterday dal Chemical, Like you're seeing
Speaker 1: some of these companies starting to report and starting starting
Speaker 1: to show this degradation and a and and so I
Speaker 1: think that's where we are. So to your point, Mike, no,
Speaker 1: I don't think we go right back. I think again,
Speaker 1: that's just people anchoring to a point that we're passed
Speaker 1: right now. And so what you want to own a
Speaker 1: really good companies, really good balance, she's really good management teams,
Speaker 1: and a lot of those companies only existed because of
Speaker 1: access liquidity, and that's part of the problem. Well, George,
Speaker 1: regular listeners of this show will know that the one
Speaker 1: thing we anchor to around here is the crazy things
Speaker 1: we saw in markets. So I don't want to segue
Speaker 1: to that a little bit early because I gotta sneak
Speaker 1: peek at your crazy things, and they really they really
Speaker 1: speak to the uh, you know, the actually the important
Speaker 1: things of the market, which uh these days are the
Speaker 1: crazy things. Funnily enough, so talk to us about the
Speaker 1: craziest things you've seen in markets recently. Yeah, and I
Speaker 1: think it really is just going back to to what
Speaker 1: I just mentioned, you know, was I mean, I'm not
Speaker 1: sure if you why if you're on Twitter at all,
Speaker 1: but some of the absolutely crazy videos that we saw
Speaker 1: from the crypto community, from you know, the meme stock community,
Speaker 1: and just really you know, it's just just things that
Speaker 1: were completely detached from reality. And I'm sure you've covered
Speaker 1: this over the past year, so this is definitely not
Speaker 1: a new topic. But yeah, I just think, you know, ultimately,
Speaker 1: the craziest thing is is that, you know, the market
Speaker 1: tends to not want to be realistic and and and
Speaker 1: again they do want to anchor, and so stripping out
Speaker 1: energy right now, you strip out make it make a
Speaker 1: cap tech under the surface. You know, the earnings picture
Speaker 1: is going to be very important over the next few quarters.
Speaker 1: And that's again where I think the market can be
Speaker 1: a little um, a little bit disappointed when they see
Speaker 1: the impacts of inflation, when they see the impacts of
Speaker 1: a strong dollar. You know, financial reality needs to step
Speaker 1: in and kind of tame the craziness in the market. Now,
Speaker 1: taming the craziness in the market probably means a decline
Speaker 1: which is not fun, but but we love it. I mean, honestly,
Speaker 1: for for our strategy, we love volatility. We love when
Speaker 1: things go down because that's when we can going to
Speaker 1: take advantage of the free money that might be out there.
Speaker 1: But you know, all that sort of gets me back
Speaker 1: to the point about that that signal that comes from
Speaker 1: the credit markets sometimes you know where you'll see uh
Speaker 1: spreads wide and aggressively long before the stock market peaks.
Speaker 1: And I wonder if there's something to be said that,
Speaker 1: you know, in in credit markets, you're only dealing with
Speaker 1: professional investors. You don't have a bunch of kids on Reddit, teenagers,
Speaker 1: you know, uh, pumping up beame stocks and you know,
Speaker 1: at in general, just the the you know, retail investing
Speaker 1: population in general, which is you know, less sophisticated, but
Speaker 1: it's gotten so much more influential over the years. Is
Speaker 1: that is that crazy talk to you to think that
Speaker 1: you know, there maybe the credit markets are a little
Speaker 1: less crazy and and that's why that signal works. There's
Speaker 1: a little bit more sobriety. They're a little bit more
Speaker 1: sort of professional analysis. Uh that's driving things than say
Speaker 1: that the stock market, especially these days when the you know,
Speaker 1: the Reddit crowds are are running the show. I think
Speaker 1: that's a fair point. If if you met you know,
Speaker 1: my CopM scott ellis Greg Zapp and v met mark
Speaker 1: Up installed over a pen mutual you know, and and
Speaker 1: Jim Fonts and and and our team you know, these
Speaker 1: are these are traditional you know, bond guys and then
Speaker 1: really good credit guys and and and they do a
Speaker 1: really good job. They're very rational, very sensible, and and
Speaker 1: so just using them as an example, I would say absolutely,
Speaker 1: there's not a lot of um, you know, running around
Speaker 1: like you know, screaming trading, nothing like that. It's it's
Speaker 1: a pretty common environment and um and yeah, I think
Speaker 1: I would agree with that. There there there is though,
Speaker 1: so you know, just going back to it, you know,
Speaker 1: there there will always be these peaks in troughs in
Speaker 1: terms of an interest in a given area. And I
Speaker 1: think one of the things specific with high yield to
Speaker 1: your point, is that there was so much demand for
Speaker 1: yield because there was none for a long period of time.
Speaker 1: So we've kind of broken that now now that we
Speaker 1: see you know, get money market rates at four percent
Speaker 1: or seeing a cur yield curve that's looking at you know,
Speaker 1: three point seven five plus you know, throughout most of
Speaker 1: the curve, and and so again I think that mentality
Speaker 1: should break a little bit in terms of UM. Again,
Speaker 1: there's available yield, so hopefully people won't have to be
Speaker 1: as desperate. Because what happens is if you think about
Speaker 1: the psychology where you're like, well, I if you target
Speaker 1: a yield and say, look, I want to get five
Speaker 1: or six percent, and if you said that over the
Speaker 1: last few years, the only way to get it was
Speaker 1: to extenderation or go down in credit quality, those were
Speaker 1: the only two ways you were taking. You were taking
Speaker 1: more risk period. So you know so so but you know,
Speaker 1: just going back to your point, yeah, credit spreads are
Speaker 1: very important. I do think you know, the credit markets
Speaker 1: uh tend to be a little more same, but they
Speaker 1: can get crazy too. I just think at this point, UM,
Speaker 1: it's it's definitely it's certainly not um you know the
Speaker 1: same as the growth markets from west here. The relative
Speaker 1: value of the craziness is uh. Alright, Emily. Then else
Speaker 1: to your real test as a professional financial journalist, Uh,
Speaker 1: you got to bring a good crazy thing to this
Speaker 1: podcast to really gain some respect. So so what do
Speaker 1: you got for us? All Right? So this was something
Speaker 1: that I saw on Bloomberg News. It involves Elon Musk
Speaker 1: So his ex girlfriend. Um. I read this article a
Speaker 1: couple of days ago. Ex girlfriend is selling off um
Speaker 1: photos and memorabilia. This is his college ex girlfriend on
Speaker 1: an online auction site. Mike, do we have time to
Speaker 1: play a little bit of The price is correct? The
Speaker 1: price it's precise, I believe. I think the price is precise.
Speaker 1: Well that Alex prices correct anything, but price is right
Speaker 1: because that that's gonna get us. Uh, that's gonna get
Speaker 1: me punched by Bob Barker. This is you. Not only
Speaker 1: did you pass the test, I think you get a
Speaker 1: percent because this is my crazy thing too. Oh my gosh.
Speaker 1: Oh well though, I think I can beat you on
Speaker 1: the prices precise, but we gotta get George to Uh.
Speaker 1: I don't know which item you're going to with. Is
Speaker 1: it the birthday card? It is? It's the birthday card.
Speaker 1: It's signed love Ellen um and this I guess it
Speaker 1: was the ex girlfriend in college. It was her birthday.
Speaker 1: So all right, I did. I did do you one
Speaker 1: better though, because I actually looked up the auction site
Speaker 1: and I found the actual live bidding on this uh
Speaker 1: on this particular item and it says happy birthday Jennifer
Speaker 1: a k A Boo boo love Elon. And I gotta say,
Speaker 1: if we were ever to have like a Crazy Thing
Speaker 1: Hall of Fame or a Crazy Thing museum, Elon Musk
Speaker 1: would get like his own wing of that of that
Speaker 1: absolutely for this. So I think we just gotta stick
Speaker 1: George with the prices correct here, George, what do you
Speaker 1: think that? What do you think the current bid is for?
Speaker 1: And Elon Musk signed birthday card to Boo Boo from college.
Speaker 1: And by the way, Elen, what's a you? Penn? So
Speaker 1: he's a Philly guy too. And Emily, you know what
Speaker 1: a little bit you can play too, Emily, because I
Speaker 1: don't think you have a live bidding prices in front
Speaker 1: of it. I don't. I did not look it up,
Speaker 1: so props to you, Mike. I can't cheat a week it.
Speaker 1: We're not allowed to sheet Okay, this guy always with
Speaker 1: the cheap code is another way you can tell he's
Speaker 1: from Philly? All right? Ten thousand dollars? Holy cow? Emily,
Speaker 1: what's your bid? What's what do you think? Alive? Fit is?
Speaker 1: I gave I gave away my poker face there. Uh
Speaker 1: so in the story the current bidding was at ten thousand,
Speaker 1: So George, George is pretty ready And I did not cheat.
Speaker 1: I promise you I did not cheat. I actually real quick, though, Michael,
Speaker 1: I do have one. I didn't get like a really
Speaker 1: crazy way. I didn't get the point even though I
Speaker 1: listened to the show. But I got one for you
Speaker 1: real quick, A right honor the Queen. The crown estate
Speaker 1: is estimated to be worth over thirty four point three
Speaker 1: billion in assets now belongs to King Charles. He will
Speaker 1: not have to pay a diamond inheritance stacks. That's pretty cool. Usually,
Speaker 1: isn't that crazy? Wow? That is nuts? Yeah, I mean
Speaker 1: I guess it's all that real estate I've read somewhere there,
Speaker 1: like the um the biggest landowner in Scotland for one thing,
Speaker 1: and all those castles even put a value on you know,
Speaker 1: the value of pose castles. So though I don't know,
Speaker 1: I don't know who's gonna who's gonna buy? You got
Speaker 1: a limited uh market for those Maybe on Musk would
Speaker 1: buy one. But anyway, current bid and there's three hours,
Speaker 1: fifty nine minutes left on this auction, Emily, in case
Speaker 1: you want to make a bid twelve thou and three
Speaker 1: dollars for the Elon Musk love letter. Emily. I don't
Speaker 1: know much about your romantic life, but if, if, if
Speaker 1: you had any significant others from college, did you save
Speaker 1: their their birthday cards? And yeah, I have some mementos. Well,
Speaker 1: we're still together, so I'll keep all the pictures of us.
Speaker 1: You better say that one day if he's the next
Speaker 1: Elon Musk, that'd be nice. Better. You gotta push him, Emily,
Speaker 1: you gotta push him, he'll be the next. That's fantastic. Well,
Speaker 1: I think that is all our time for the show. George.
Speaker 1: Great to catch up the Emily. It makes me homesick
Speaker 1: to hear George with that Philly accent. Is before you leave, though, George,
Speaker 1: I gotta hear you say. When you go to the
Speaker 1: fawcehead and you turn it on and you put a
Speaker 1: glass under it, what's coming out? Water? Water? Of course,
Speaker 1: it's water. I know. You go, you go get water
Speaker 1: out of the creek. And then George, if you wanna say,
Speaker 1: get a six pack of beer and you want to
Speaker 1: keep it cold, and you've got an appliance in your kitchen,
Speaker 1: what do you what's that appliance called bridge refrigerator A
Speaker 1: supposed to say definitely refrigerator refrigerator. Yeah, no, you're saying
Speaker 1: it right, you're saying it right. Okay, Okay. Finally a guy. Finally,
Speaker 1: a guy on this show without an accent. Emily, where
Speaker 1: you got a supermarket? What's what's your favorite supermarket? Uh? Boy,
Speaker 1: where are you going with this? Yeah? It's so funny
Speaker 1: because when I first moved up to New York from
Speaker 1: Philly and uh years ago, um, my co workers are like,
Speaker 1: are you from the South talking about accent? Right? Right?
Speaker 1: It's got to be from far away. Uh. Finally a
Speaker 1: guest with the proper pronunciation of all the amquitant words.
Speaker 1: George seppalone, is so great to catch up with you.
Speaker 1: Thanks for sharing your time with us and your insights.
Speaker 1: Really appreciate it. Thank you both appreciate it. Thanks George
Speaker 1: Acromy achromy what goes up? We'll be back next week
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