1 00:00:02,480 --> 00:00:15,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:18,200 --> 00:00:21,599 Speaker 2: Hello and welcome to another episode of The Odd Lots podcast. 3 00:00:21,680 --> 00:00:24,840 Speaker 2: I'm Jill Wisenthal and I'm Tracy Alloway. Tracy, you know 4 00:00:24,880 --> 00:00:26,200 Speaker 2: I've never had nutello before. 5 00:00:26,800 --> 00:00:29,200 Speaker 3: I know that. I think we're talking about this the 6 00:00:29,240 --> 00:00:31,800 Speaker 3: other day and I said, and I mean this one 7 00:00:31,880 --> 00:00:34,000 Speaker 3: hundred percent, and I don't mean it to come off badly, 8 00:00:34,040 --> 00:00:36,680 Speaker 3: but I genuinely feel really sorry for you for never 9 00:00:36,760 --> 00:00:39,599 Speaker 3: having newtella. I feel like you are missing out on 10 00:00:39,600 --> 00:00:41,560 Speaker 3: one of the best things in life. 11 00:00:41,720 --> 00:00:44,800 Speaker 2: And you know, I've never had the Dubai chocolate before either. 12 00:00:45,040 --> 00:00:45,239 Speaker 4: I know. 13 00:00:45,520 --> 00:00:48,919 Speaker 3: Again, my sympathy for you just continues to expand. 14 00:00:49,320 --> 00:00:51,360 Speaker 2: So as everyone knows, you know, I'm just like a 15 00:00:51,400 --> 00:00:53,519 Speaker 2: real ahead of the curve guy in most things. I 16 00:00:53,640 --> 00:00:56,080 Speaker 2: was really ahead of the curve. I'm having nut allergies 17 00:00:56,560 --> 00:00:59,520 Speaker 2: because now like all kids basically have nut allergies. It 18 00:00:59,560 --> 00:01:02,000 Speaker 2: seems like or like half the kids in any my 19 00:01:02,080 --> 00:01:04,280 Speaker 2: kids class. But I was like, really early on in 20 00:01:04,280 --> 00:01:05,200 Speaker 2: the nineteen. 21 00:01:04,800 --> 00:01:06,559 Speaker 3: You're having nut allergies before it was cool. 22 00:01:06,640 --> 00:01:08,880 Speaker 2: I was having nut allergies before it was cool. I'm 23 00:01:08,920 --> 00:01:12,280 Speaker 2: aware that people love nutella. I'm aware that people love 24 00:01:12,520 --> 00:01:14,839 Speaker 2: Dubai chocolate or some people do, or they at least 25 00:01:14,840 --> 00:01:18,040 Speaker 2: like posting about it on Instagram and all things pistachios, 26 00:01:18,040 --> 00:01:20,560 Speaker 2: et cetera. And yes, but I take it. It's all 27 00:01:20,560 --> 00:01:21,120 Speaker 2: good stuff. 28 00:01:21,440 --> 00:01:24,800 Speaker 3: It's so good. Oh my god, it's I mean, there 29 00:01:24,880 --> 00:01:28,280 Speaker 3: is nothing better than eating nutella out of a spoon, 30 00:01:29,040 --> 00:01:31,959 Speaker 3: or sorry, eating nutella out of a jar with a spoon, 31 00:01:32,160 --> 00:01:34,920 Speaker 3: preferably with a glass of milk. Like, it is so good, 32 00:01:35,040 --> 00:01:37,400 Speaker 3: it looks good. Do you buy chocolate? 33 00:01:37,480 --> 00:01:38,119 Speaker 4: Have you had it? 34 00:01:38,200 --> 00:01:41,319 Speaker 3: I have, but I'm not that enamored with it. 35 00:01:41,400 --> 00:01:43,759 Speaker 2: Interesting. I remember, like it was probably like a year 36 00:01:43,760 --> 00:01:46,280 Speaker 2: and a half ago, and I just started seeing like signs. 37 00:01:46,319 --> 00:01:48,160 Speaker 2: It's like we have the du Bui chocolate. 38 00:01:48,360 --> 00:01:49,120 Speaker 3: Oh they're everywhere. 39 00:01:49,200 --> 00:01:49,520 Speaker 4: Yeah. 40 00:01:49,560 --> 00:01:52,160 Speaker 2: But the other day I went to my the local 41 00:01:52,200 --> 00:01:55,600 Speaker 2: deli on my block and they had five just on 42 00:01:55,640 --> 00:02:00,400 Speaker 2: the counter. They had five different versions, five different company 43 00:02:00,520 --> 00:02:02,840 Speaker 2: selling it, five different products that you could buy, which 44 00:02:02,880 --> 00:02:04,800 Speaker 2: I take is just some sort of you know, chocolate 45 00:02:04,800 --> 00:02:06,960 Speaker 2: with some sort of creamy pistache shoe in the middle, 46 00:02:07,200 --> 00:02:09,360 Speaker 2: and if you break it open, it looks good. On 47 00:02:09,400 --> 00:02:11,120 Speaker 2: social media, that's pretty much it. 48 00:02:11,600 --> 00:02:13,560 Speaker 3: I do find it kind of funny that this like 49 00:02:13,760 --> 00:02:17,600 Speaker 3: viral chocolate has come out of Dubai, of all places, 50 00:02:17,639 --> 00:02:22,520 Speaker 3: which doesn't necessarily have a strong confectionery history, but it 51 00:02:22,560 --> 00:02:25,400 Speaker 3: has certainly tapped into various luxury markets. So I think 52 00:02:25,400 --> 00:02:26,160 Speaker 3: that's what's going on. 53 00:02:26,240 --> 00:02:30,960 Speaker 2: I was looking through the conference called transcripts on the 54 00:02:30,960 --> 00:02:32,920 Speaker 2: Bloomberg a few weeks ago, and I was looking like, 55 00:02:33,120 --> 00:02:35,600 Speaker 2: what companies have talked about this? And there's one big 56 00:02:36,000 --> 00:02:39,480 Speaker 2: Swiss publicly traded chocolatier and they talked about it, and 57 00:02:39,480 --> 00:02:42,360 Speaker 2: they talked about I guess it was a woman and 58 00:02:42,480 --> 00:02:44,639 Speaker 2: Dubai just started making it. Then we called it the 59 00:02:44,720 --> 00:02:47,000 Speaker 2: Dubai chocolate. Anyway, they were talking about how fast they 60 00:02:47,040 --> 00:02:50,680 Speaker 2: adapted to TikTok trends, et cetera. But I guess the 61 00:02:50,680 --> 00:02:54,200 Speaker 2: business of nuts and how it works not something that 62 00:02:54,240 --> 00:02:56,960 Speaker 2: we discussed much, maybe because of my own you know, 63 00:02:57,000 --> 00:02:59,760 Speaker 2: I'm allergic to talk about these topics. 64 00:02:59,760 --> 00:03:01,440 Speaker 3: Well, there is one nut that. 65 00:03:01,440 --> 00:03:03,400 Speaker 2: You can eat, that's right, almends. 66 00:03:03,000 --> 00:03:06,040 Speaker 3: Almonds, and I still manage to poison you once with almonds. 67 00:03:06,120 --> 00:03:07,120 Speaker 3: I feel really bad about it. 68 00:03:07,120 --> 00:03:07,760 Speaker 2: How did it happen? 69 00:03:08,000 --> 00:03:10,160 Speaker 3: I don't know. I so for listeners. I didn't do 70 00:03:10,160 --> 00:03:12,040 Speaker 3: it on purpose. I bought him some of those Korean 71 00:03:12,120 --> 00:03:15,320 Speaker 3: nuts that we've been talking about in the snack Food episode, 72 00:03:15,400 --> 00:03:17,440 Speaker 3: and they were almonds, so we thought they were okay, but. 73 00:03:17,480 --> 00:03:20,720 Speaker 2: Like laced with something else omens. I guess I didn't die. 74 00:03:20,919 --> 00:03:23,680 Speaker 3: Yeah, so that's always a plus. I didn't kill my co. 75 00:03:23,720 --> 00:03:28,320 Speaker 2: Host anyway, despite my own Because I'm a journalist dedicated 76 00:03:28,320 --> 00:03:30,440 Speaker 2: to learning about the truth about the world, I will 77 00:03:30,680 --> 00:03:35,080 Speaker 2: get over my personal biases against nuts in pursuit of 78 00:03:35,160 --> 00:03:38,480 Speaker 2: journalistic truth and learning more about how all these businesses work, 79 00:03:38,480 --> 00:03:40,920 Speaker 2: in the chocolate business and all these work, how these work, 80 00:03:41,320 --> 00:03:43,760 Speaker 2: just because I want to learn more about the world, 81 00:03:43,960 --> 00:03:46,240 Speaker 2: even when I cannot partake of its goodness. 82 00:03:46,640 --> 00:03:48,840 Speaker 3: I think that is a very worthy cause. The one 83 00:03:48,840 --> 00:03:51,440 Speaker 3: thing I would say is this is really interesting from 84 00:03:51,480 --> 00:03:54,440 Speaker 3: just an investment and business perspective, because you have heard 85 00:03:54,480 --> 00:03:56,840 Speaker 3: every once in a while people do get really excited 86 00:03:56,840 --> 00:04:00,720 Speaker 3: about nuts as an investment. And the exact I'm thinking 87 00:04:00,760 --> 00:04:05,280 Speaker 3: of is remember Michael Burry years ago. Yeah, his whole 88 00:04:05,320 --> 00:04:08,920 Speaker 3: thing was invest in almonds because they're so water intensive. 89 00:04:08,960 --> 00:04:12,839 Speaker 3: It's basically a play on water shortages. I don't think 90 00:04:12,840 --> 00:04:13,640 Speaker 3: it worked out that. 91 00:04:13,680 --> 00:04:17,120 Speaker 2: Way, so I'm kind of curious. Uh Yeah, that was 92 00:04:17,160 --> 00:04:18,920 Speaker 2: like at the end of the big short that very 93 00:04:18,960 --> 00:04:21,880 Speaker 2: cryptic ending where they're like and after betting against the 94 00:04:21,920 --> 00:04:25,080 Speaker 2: collapse of the US housing market, he's now shifted his 95 00:04:25,120 --> 00:04:26,760 Speaker 2: attention to almonds. 96 00:04:27,400 --> 00:04:29,760 Speaker 3: They said, they didn't even say almonds would have. 97 00:04:29,800 --> 00:04:34,080 Speaker 2: Very strange anyway, Yes, what can we learn through the 98 00:04:34,120 --> 00:04:38,200 Speaker 2: medium of nuts? Anyway, very excited to say that. We 99 00:04:38,279 --> 00:04:40,000 Speaker 2: have a couple of guests today who have been doing 100 00:04:40,040 --> 00:04:43,520 Speaker 2: a lot of work on nuts. Someone a couple of guests. 101 00:04:43,520 --> 00:04:45,960 Speaker 2: I think we talked to them about five years ago 102 00:04:46,480 --> 00:04:48,040 Speaker 2: during the pandemic. 103 00:04:48,560 --> 00:04:48,680 Speaker 4: Uh. 104 00:04:48,800 --> 00:04:51,039 Speaker 2: They're interested in frontier markets. They go all around the 105 00:04:51,040 --> 00:04:54,520 Speaker 2: world looking for interesting opportunities that are off the beaten path. 106 00:04:54,839 --> 00:04:57,440 Speaker 2: They've been doing some research on the hazel nut industry 107 00:04:57,520 --> 00:05:00,120 Speaker 2: and they're based in Dubai. We're gonna be speaking with 108 00:05:00,160 --> 00:05:03,520 Speaker 2: Burton Flynn and Ivan Neutronev. They are managing partners at 109 00:05:03,560 --> 00:05:07,560 Speaker 2: Terra Nova Capital. They scour the world for interesting stories. 110 00:05:07,600 --> 00:05:09,919 Speaker 2: They're based in Dubai. Burton and Ivan, thank you so 111 00:05:10,000 --> 00:05:12,960 Speaker 2: much for coming back on odd Lots, and thank you so. 112 00:05:13,000 --> 00:05:13,760 Speaker 4: Much for having us. 113 00:05:14,800 --> 00:05:15,840 Speaker 5: Yeah, thanks for having us. 114 00:05:15,920 --> 00:05:19,080 Speaker 2: I just have like a really simple question. In Dubai, 115 00:05:19,360 --> 00:05:23,679 Speaker 2: is it just called chocolate? Like or do they also 116 00:05:23,760 --> 00:05:26,440 Speaker 2: specify that it's Dubai chocolate even when it's in Dubai. 117 00:05:27,040 --> 00:05:30,400 Speaker 4: Like you know, the original Dubai chocolate is called fix 118 00:05:31,640 --> 00:05:34,920 Speaker 4: and so in Dubai there's fixed chocolate and then there's 119 00:05:34,960 --> 00:05:38,240 Speaker 4: the knockoff you know, other kinds of chocolates and the 120 00:05:38,279 --> 00:05:41,000 Speaker 4: fixed chocolate. I didn't know this when I received it 121 00:05:41,040 --> 00:05:44,000 Speaker 4: as a gift once actually about six months ago, when 122 00:05:44,279 --> 00:05:46,480 Speaker 4: the first time I had it, somebody brought it to 123 00:05:46,520 --> 00:05:49,479 Speaker 4: my house. They brought me five bars and as a gift, 124 00:05:49,520 --> 00:05:52,159 Speaker 4: and we ate them that week. And then later I 125 00:05:52,320 --> 00:05:55,039 Speaker 4: found out that these bars go for like twenty five 126 00:05:55,080 --> 00:05:55,760 Speaker 4: dollars apiece. 127 00:05:55,839 --> 00:05:57,880 Speaker 2: Oh that was a good guest, so I did. 128 00:05:58,000 --> 00:06:02,080 Speaker 3: Yeah, it was how much of that is the cocoa 129 00:06:02,120 --> 00:06:05,320 Speaker 3: price versus the pistachio price, because we've seen both of 130 00:06:05,360 --> 00:06:06,760 Speaker 3: those kind of go up recently. 131 00:06:07,080 --> 00:06:10,960 Speaker 4: Well, I mean this was before any of that went up, right, 132 00:06:11,040 --> 00:06:14,919 Speaker 4: So this is all just margin based on marketing, I 133 00:06:14,920 --> 00:06:15,560 Speaker 4: think branding. 134 00:06:16,360 --> 00:06:19,560 Speaker 2: So what do you tell us, generally speaking, besides the 135 00:06:19,640 --> 00:06:22,680 Speaker 2: fact that you're in Dubai, actually tell us about the 136 00:06:22,720 --> 00:06:24,840 Speaker 2: work that you do. We sort of covered it in 137 00:06:25,279 --> 00:06:27,880 Speaker 2: when we talked to you in twenty twenty, but presumably 138 00:06:27,920 --> 00:06:30,120 Speaker 2: we have a lot of listeners who haven't listened to 139 00:06:30,120 --> 00:06:32,719 Speaker 2: that episode. What do both of you tell us, like 140 00:06:32,960 --> 00:06:36,479 Speaker 2: how you approach your work discovering new thing interesting things 141 00:06:36,480 --> 00:06:37,120 Speaker 2: around the world. 142 00:06:37,440 --> 00:06:40,480 Speaker 4: First of all, what we look for in our objective 143 00:06:40,800 --> 00:06:43,320 Speaker 4: is to find stocks that can double in twelve months. 144 00:06:43,480 --> 00:06:45,400 Speaker 4: And the way that we do that is we look 145 00:06:45,480 --> 00:06:50,200 Speaker 4: for basically, you guys know, growth GARP investing right, growth 146 00:06:50,520 --> 00:06:54,279 Speaker 4: at a reasonable price. We are not GARP investors. We 147 00:06:54,400 --> 00:06:59,040 Speaker 4: are growth at an unreasonable price investors. We go on 148 00:06:59,120 --> 00:07:03,200 Speaker 4: and we look for or really huge earnings, growth that 149 00:07:03,480 --> 00:07:08,720 Speaker 4: is being completely miss understood or completely overlooked, because, you 150 00:07:08,760 --> 00:07:11,680 Speaker 4: know what, we believe that a good stock, you know, 151 00:07:11,720 --> 00:07:14,440 Speaker 4: it has to be a good business plus something that's 152 00:07:14,560 --> 00:07:17,600 Speaker 4: fundamentally misunderstood. So the way that we do this is 153 00:07:17,640 --> 00:07:20,720 Speaker 4: we approach it from several different angles. One is that 154 00:07:20,800 --> 00:07:24,280 Speaker 4: on a daily basis, we're looking at insider transactions basically 155 00:07:24,360 --> 00:07:27,560 Speaker 4: CEOs buying theirs of their own companies. We find that 156 00:07:27,600 --> 00:07:30,160 Speaker 4: to be a really strong signal. We also look for 157 00:07:30,280 --> 00:07:34,400 Speaker 4: companies that have very good leading indicators to their earnings 158 00:07:34,640 --> 00:07:38,520 Speaker 4: and we try to monitor those and then also periodically 159 00:07:38,600 --> 00:07:40,800 Speaker 4: we like to reach out to all of the companies 160 00:07:40,840 --> 00:07:44,440 Speaker 4: we've met, and at this point we together Ivan and 161 00:07:44,520 --> 00:07:47,880 Speaker 4: I have met over two thousand companies. We've conducted twenty 162 00:07:47,920 --> 00:07:51,640 Speaker 4: six hundred meetings in the past six years with both 163 00:07:51,640 --> 00:07:54,080 Speaker 4: of us. In all of those meetings, most of those 164 00:07:54,080 --> 00:07:57,240 Speaker 4: were with CEOs, and so we like to reach out 165 00:07:57,400 --> 00:08:02,000 Speaker 4: periodically and just ask about top all situations that are happening. 166 00:08:02,280 --> 00:08:04,600 Speaker 4: The most recent one was the Trump terraces. You know 167 00:08:04,920 --> 00:08:07,120 Speaker 4: and understand how it's affecting your business. So we get 168 00:08:07,200 --> 00:08:10,520 Speaker 4: kind of a global view based on a bottom up perspective. 169 00:08:10,800 --> 00:08:13,280 Speaker 3: So how did nuts actually get on your radar other 170 00:08:13,360 --> 00:08:15,840 Speaker 3: than you know, a friend gave you twenty five bars 171 00:08:15,880 --> 00:08:17,560 Speaker 3: of overpriced luxury chocolate. 172 00:08:17,880 --> 00:08:20,239 Speaker 5: Well, you know, it's an interesting story because we're based 173 00:08:20,240 --> 00:08:23,160 Speaker 5: in Dubai, so just by definition, we are right in 174 00:08:23,160 --> 00:08:26,800 Speaker 5: the center of this Dubai chocolate hysteria. Like you see 175 00:08:26,840 --> 00:08:30,600 Speaker 5: du Bai chocolate bars everywhere in the grocery stores, then 176 00:08:30,640 --> 00:08:32,880 Speaker 5: you see them when you order food online, you see 177 00:08:32,880 --> 00:08:36,439 Speaker 5: them on the billboards, and you know, sometimes you hear 178 00:08:36,480 --> 00:08:39,960 Speaker 5: from people that haven't been in touch for like ten years, 179 00:08:40,040 --> 00:08:42,240 Speaker 5: and then they message you and all they want is 180 00:08:42,280 --> 00:08:45,040 Speaker 5: not actually even ask how are you doing. But they 181 00:08:45,080 --> 00:08:47,520 Speaker 5: just want you to ship some Dubai chocolate to them 182 00:08:47,800 --> 00:08:51,840 Speaker 5: by some express courier delivery, and you know, it's fun. 183 00:08:51,920 --> 00:08:56,359 Speaker 5: A lot of media has written about the Dubai chocolate phenomenon, 184 00:08:56,880 --> 00:08:59,920 Speaker 5: and I think there was also a claim that Dubai 185 00:09:00,280 --> 00:09:05,120 Speaker 5: chocolate led to some severe shortages of pistachios and skyrocketing 186 00:09:05,200 --> 00:09:09,000 Speaker 5: prices of pistachios, which is debatable. But one day we 187 00:09:09,040 --> 00:09:11,760 Speaker 5: were in office and we were just just jogging around 188 00:09:11,840 --> 00:09:15,720 Speaker 5: and we were saying, look, you know, pistachios are such 189 00:09:15,760 --> 00:09:19,160 Speaker 5: a kind of a hot niche commodity. Now, let's let's 190 00:09:19,160 --> 00:09:21,320 Speaker 5: have a look at something else. What about hazel nuts, 191 00:09:21,520 --> 00:09:23,640 Speaker 5: because you know, they're also used in chocolates and so on, 192 00:09:23,760 --> 00:09:26,560 Speaker 5: even in some of the variations of the Dubai chocolate 193 00:09:26,559 --> 00:09:29,920 Speaker 5: and knokovlans. And we checked kind of the recent news 194 00:09:29,920 --> 00:09:33,400 Speaker 5: about hazel nuts just to see what's going on with 195 00:09:33,440 --> 00:09:36,800 Speaker 5: the hazel nuts, and what we found was actually quite 196 00:09:37,000 --> 00:09:39,480 Speaker 5: you know, it was really really really interesting. 197 00:09:40,400 --> 00:09:42,800 Speaker 2: Well, before we actually get to the hazel nuts, I'm 198 00:09:42,880 --> 00:09:47,600 Speaker 2: curious you mentioned there these metia reports of pistachie shortages 199 00:09:47,720 --> 00:09:51,960 Speaker 2: or skyrocketing, skyrocketing prices and then you said, but that's debatable. 200 00:09:52,440 --> 00:09:56,160 Speaker 2: What actually is happening? You know, I don't know, I 201 00:09:56,160 --> 00:09:58,120 Speaker 2: don't know. I don't think we have like a pistachio 202 00:09:58,200 --> 00:10:01,680 Speaker 2: index on the terminal, although I've never actually looked. 203 00:10:01,880 --> 00:10:04,800 Speaker 3: I think a lot of them come from Iran, which 204 00:10:04,920 --> 00:10:05,560 Speaker 3: I also. 205 00:10:05,360 --> 00:10:07,800 Speaker 2: Coright, which right also, But like actually, what like how 206 00:10:07,840 --> 00:10:10,800 Speaker 2: do you what is happening in the pistachio market. What 207 00:10:10,920 --> 00:10:13,760 Speaker 2: has been the effect so far as you can tell, 208 00:10:14,040 --> 00:10:18,679 Speaker 2: from the Dubai chocolate craze to the actual trade in pistachios. 209 00:10:19,120 --> 00:10:22,040 Speaker 5: Actually, quite a lot has to do simply with weather. 210 00:10:22,480 --> 00:10:26,240 Speaker 5: It's not only it's not only the Dubui chocolate demand, 211 00:10:27,320 --> 00:10:29,800 Speaker 5: but a lot of that has to do with the weather, 212 00:10:30,080 --> 00:10:33,280 Speaker 5: and just the weather was not favorable enough and the 213 00:10:34,080 --> 00:10:37,360 Speaker 5: crop was not good enough. So as simple as that. 214 00:10:37,480 --> 00:10:40,359 Speaker 5: So because I remember there was one expert on pistachio 215 00:10:40,440 --> 00:10:43,200 Speaker 5: supply chain and he was saying that basically there is 216 00:10:43,240 --> 00:10:46,400 Speaker 5: now so much talk and a lot of media articles 217 00:10:46,440 --> 00:10:49,840 Speaker 5: claiming that it's all about du Bui chocolate, but in reality, 218 00:10:50,000 --> 00:10:54,520 Speaker 5: the Bui chocolate doesn't use the row pistachios. You know, 219 00:10:54,520 --> 00:10:57,240 Speaker 5: it's a paste, and a paste is very very diluted, 220 00:10:57,600 --> 00:11:00,320 Speaker 5: so you don't really need like all the pistache in 221 00:11:00,320 --> 00:11:03,480 Speaker 5: the world to produce the by chocolate. But you know, 222 00:11:03,559 --> 00:11:07,679 Speaker 5: if the weather events affect the crop, then of course 223 00:11:07,720 --> 00:11:09,960 Speaker 5: the price of the commodity will go up. And this 224 00:11:10,080 --> 00:11:13,560 Speaker 5: is something that also happened to the hazel nuts this year. 225 00:11:14,840 --> 00:11:17,280 Speaker 3: So it's a supply story more than a demand story 226 00:11:17,320 --> 00:11:18,880 Speaker 3: for pistachios, at least. 227 00:11:20,400 --> 00:11:22,600 Speaker 5: It could be both, could be both, but without the 228 00:11:22,640 --> 00:11:27,160 Speaker 5: supply shortage there would not be such a severe price appreciation. 229 00:11:27,720 --> 00:11:29,920 Speaker 3: How did Turkey get into the hazelnut business because they 230 00:11:29,960 --> 00:11:32,960 Speaker 3: seem to have made a conscious decision to actually, you know, 231 00:11:33,120 --> 00:11:35,199 Speaker 3: nurse this particular type of agriculture. 232 00:11:35,720 --> 00:11:39,320 Speaker 5: Yeah, it's a long story which goes back thousands of years, 233 00:11:40,160 --> 00:11:45,280 Speaker 5: and the situation is that Turkish Black Sea region is 234 00:11:45,559 --> 00:11:49,080 Speaker 5: naturally the best region in the world to grow hazel 235 00:11:49,120 --> 00:11:53,520 Speaker 5: nuts because hazel nuts need a cool winter, they also 236 00:11:53,600 --> 00:11:56,840 Speaker 5: need sunny, warm spring and also need a rainy summer, 237 00:11:57,200 --> 00:11:59,520 Speaker 5: and this is exactly what the Turkish Black Sea region 238 00:12:00,120 --> 00:12:03,400 Speaker 5: gives them. And they've been cultivated in Turkey for thousands 239 00:12:03,440 --> 00:12:07,400 Speaker 5: of years. So today there are six hundred thousand farmers 240 00:12:07,440 --> 00:12:10,360 Speaker 5: that grow hazel nuts in Turkey, and there are over 241 00:12:10,480 --> 00:12:14,040 Speaker 5: five million people in Turkey who are in some way 242 00:12:14,160 --> 00:12:18,319 Speaker 5: involved in the hazelnut farming or trading business. So it's 243 00:12:18,360 --> 00:12:21,240 Speaker 5: a very, very long history. It just came naturally. It's 244 00:12:21,320 --> 00:12:24,000 Speaker 5: just where the hazelnuts grow. In a given year, Turkey 245 00:12:24,000 --> 00:12:27,560 Speaker 5: produces about seventy percent of all the hazel nuts in 246 00:12:27,600 --> 00:12:32,440 Speaker 5: the world, so the concentration in this industry is huge. 247 00:12:32,520 --> 00:12:36,640 Speaker 5: It's like seventy percent of all hazelnuts. So if something 248 00:12:36,720 --> 00:12:40,400 Speaker 5: happens to the Turkish hazelnut crop, you know, the consequences 249 00:12:40,440 --> 00:12:55,520 Speaker 5: to the supply can be severe. 250 00:12:57,520 --> 00:13:01,240 Speaker 2: What is the market structure of the Turkish hate nut industry? 251 00:13:01,559 --> 00:13:04,760 Speaker 2: How fragmented are those six hundred thousand farmers? Is a 252 00:13:04,920 --> 00:13:09,960 Speaker 2: huge agribusinesses that dominate the trade. And then what is 253 00:13:10,000 --> 00:13:12,360 Speaker 2: the exchange process? Like I don't know, I assume there's 254 00:13:12,360 --> 00:13:15,240 Speaker 2: not hazel nut futures, but talk to us about like 255 00:13:15,559 --> 00:13:19,480 Speaker 2: that process by which the nuts get to the processors 256 00:13:19,480 --> 00:13:21,559 Speaker 2: and then into a finished product. 257 00:13:22,040 --> 00:13:25,080 Speaker 5: So there's six hundred thousand farmers, they are quite fragmented. 258 00:13:25,480 --> 00:13:30,240 Speaker 5: It's basically some artisan mamonopop farmer shops, and then there 259 00:13:30,240 --> 00:13:33,920 Speaker 5: are some wholesalers who buy hazel nuts from the farmers 260 00:13:34,440 --> 00:13:38,040 Speaker 5: when the harvest time comes around, which is actually next week, 261 00:13:38,679 --> 00:13:42,000 Speaker 5: and then as wholesalers, they might sell their hazel nuts 262 00:13:42,000 --> 00:13:44,840 Speaker 5: to the exporters and then the exporters sell them abroad, 263 00:13:45,480 --> 00:13:48,520 Speaker 5: or some of these wholesalers they also act as exporters. 264 00:13:48,840 --> 00:13:51,560 Speaker 5: So basically, if you compare the hazel nut industry in 265 00:13:51,640 --> 00:13:55,400 Speaker 5: Turkey to the one in Chile, then the Turkish one 266 00:13:55,640 --> 00:13:59,679 Speaker 5: is much more old school. It's very small orchards, it's 267 00:13:59,679 --> 00:14:04,120 Speaker 5: famine businesses, it's some standalone farms, whereas for example, in 268 00:14:04,559 --> 00:14:07,719 Speaker 5: Chile it's kind of industrial scale, and then once a 269 00:14:07,800 --> 00:14:11,800 Speaker 5: year this all gets consolidated. The farmers sell their hazel 270 00:14:11,880 --> 00:14:15,640 Speaker 5: nuts to wholesalers and then the entire kind of chain starts. 271 00:14:15,920 --> 00:14:20,120 Speaker 5: It's quite fragmented, and you know, the quality of the 272 00:14:20,280 --> 00:14:24,080 Speaker 5: entire hazel nut production in Turkey is lower than in 273 00:14:24,080 --> 00:14:26,840 Speaker 5: some other parts of the world because also it's not 274 00:14:26,880 --> 00:14:29,400 Speaker 5: only the history, it's also kind of the terrain. It's 275 00:14:29,440 --> 00:14:32,840 Speaker 5: a bit hilly. It's much harder to have these huge 276 00:14:32,880 --> 00:14:36,600 Speaker 5: fields of hazelnut plantations. It's a long standing tradition and 277 00:14:36,640 --> 00:14:39,920 Speaker 5: it's very very hard to bring any innovation into the 278 00:14:40,040 --> 00:14:41,760 Speaker 5: Turkish hazelnut farming. 279 00:14:42,760 --> 00:14:46,440 Speaker 3: Okay, so you have a traditional business that's resistant to 280 00:14:46,520 --> 00:14:50,960 Speaker 3: innovation in an emerging market that is very, very fragmented 281 00:14:51,560 --> 00:14:54,600 Speaker 3: and also pretty untransparent because it's not like you can 282 00:14:54,600 --> 00:14:58,880 Speaker 3: look up a single benchmark for hazelnut prices. How do 283 00:14:58,920 --> 00:15:02,640 Speaker 3: you deal with I guess the opaqueness of a niche 284 00:15:02,840 --> 00:15:05,840 Speaker 3: commodity like this when you're evaluating an investment. 285 00:15:07,400 --> 00:15:10,000 Speaker 4: Well, this is this is exactly the kind of situation 286 00:15:10,080 --> 00:15:13,960 Speaker 4: we love, actually is opaqueness because it means that it's 287 00:15:13,960 --> 00:15:17,240 Speaker 4: difficult for others to kind of access you know, access 288 00:15:17,280 --> 00:15:20,200 Speaker 4: the information. And so the way we approach it is 289 00:15:20,360 --> 00:15:22,680 Speaker 4: we try to find primary sources, right and so in 290 00:15:22,720 --> 00:15:26,480 Speaker 4: this in this case, we have had the opportunity to 291 00:15:26,520 --> 00:15:32,720 Speaker 4: talk to the world's largest hazelnut processing company and basically 292 00:15:33,320 --> 00:15:36,080 Speaker 4: understand the market situation from them, you know, and then 293 00:15:36,200 --> 00:15:38,880 Speaker 4: kind of collaborate this with other sources that we find 294 00:15:38,960 --> 00:15:43,120 Speaker 4: and you know, continue to ask them questions to understand 295 00:15:43,120 --> 00:15:46,800 Speaker 4: the market situation. But you know, it's possible that we 296 00:15:46,880 --> 00:15:49,400 Speaker 4: might be the you know, some of the world's best 297 00:15:49,520 --> 00:15:52,600 Speaker 4: experts on hazel that's even though we didn't know anything 298 00:15:52,640 --> 00:15:53,680 Speaker 4: about them two months ago. 299 00:15:53,800 --> 00:15:56,800 Speaker 3: So what do you look at in terms of just pricing. 300 00:15:57,160 --> 00:15:59,440 Speaker 4: There is pricing. It's not something you can pull up 301 00:15:59,440 --> 00:16:02,480 Speaker 4: on Bloomberg. So basically, when we are talking to the 302 00:16:02,520 --> 00:16:08,560 Speaker 4: CEO of this hazel nut operating operator, he said that, 303 00:16:09,400 --> 00:16:13,400 Speaker 4: you know, it's it's basically a price that it's called 304 00:16:13,400 --> 00:16:15,120 Speaker 4: on the phone. I mean, it's this is like old 305 00:16:15,120 --> 00:16:17,400 Speaker 4: school trading practices. 306 00:16:18,360 --> 00:16:22,320 Speaker 5: There are no hazel nut futures. It's nearly impossible to 307 00:16:22,440 --> 00:16:26,680 Speaker 5: trade hazel nuts, you know, through any agricultural exchanges, and 308 00:16:26,840 --> 00:16:31,320 Speaker 5: it makes this market so inaccessible that it's it's very hard. 309 00:16:31,360 --> 00:16:33,680 Speaker 5: It's very hard for a regular investor to play it. 310 00:16:34,240 --> 00:16:36,520 Speaker 5: I mean, I think the only way to play the 311 00:16:36,520 --> 00:16:41,840 Speaker 5: hazelnut market is probably through this only listed public like 312 00:16:41,960 --> 00:16:45,680 Speaker 5: the only publicly listed hazel nut processing company in the world, 313 00:16:45,760 --> 00:16:47,920 Speaker 5: and it's listed in Turkey, which also is not so 314 00:16:47,960 --> 00:16:50,960 Speaker 5: easy to access. But when it comes to hazel nuts themselves, 315 00:16:50,960 --> 00:16:54,440 Speaker 5: it looks like you just need to find the party 316 00:16:54,520 --> 00:16:57,000 Speaker 5: that can sell this hazel nuts and you just buy 317 00:16:57,040 --> 00:16:59,840 Speaker 5: the bags the tones of hazel nuts, but you also 318 00:16:59,840 --> 00:17:02,680 Speaker 5: need to find a transportation, you need to find the 319 00:17:02,760 --> 00:17:05,159 Speaker 5: storage and then and then you need to find a buyer. 320 00:17:05,440 --> 00:17:08,440 Speaker 5: When you want to sell. So it's it's a very 321 00:17:09,000 --> 00:17:10,640 Speaker 5: very difficult one to accident. 322 00:17:26,800 --> 00:17:29,600 Speaker 2: Something I'm interested in, you know, this idea of there 323 00:17:29,680 --> 00:17:33,240 Speaker 2: not having been much productivity gains in the actual farming 324 00:17:33,520 --> 00:17:37,280 Speaker 2: of hazel nuts. And I'm sort of fascinated by the 325 00:17:37,400 --> 00:17:42,440 Speaker 2: degree to which different commodities inherently lend themselves to varying 326 00:17:42,560 --> 00:17:46,239 Speaker 2: levels of mechanization in production. Right, And so you know, 327 00:17:46,280 --> 00:17:50,800 Speaker 2: you could have competitively priced wheat in that's grown in America, 328 00:17:51,320 --> 00:17:54,639 Speaker 2: competitively priced wheat that's grown in Russia, competitively priced wheat 329 00:17:54,680 --> 00:17:57,080 Speaker 2: or corn that's grown in Brazil, all because there's very 330 00:17:57,119 --> 00:18:00,760 Speaker 2: little labor involved. You have like one one combine out 331 00:18:00,760 --> 00:18:03,320 Speaker 2: there on a giant field, and then you have other 332 00:18:03,880 --> 00:18:07,479 Speaker 2: commodities that are inherently labor intensative because it's not so 333 00:18:07,520 --> 00:18:10,480 Speaker 2: easy to automate. What have you seen, you know, as 334 00:18:10,520 --> 00:18:14,720 Speaker 2: you've gone around the world to frontier various frontier markets, 335 00:18:14,920 --> 00:18:18,760 Speaker 2: the sort of range by which some commodities lend themselves 336 00:18:18,800 --> 00:18:20,680 Speaker 2: to productivity gains and some don't. 337 00:18:21,560 --> 00:18:24,080 Speaker 5: You know, for example, in this hazel nut industry, right, 338 00:18:24,119 --> 00:18:27,280 Speaker 5: we can look at turkey, which we discussed it's artisanal, 339 00:18:27,840 --> 00:18:30,480 Speaker 5: and then we can look at something like Chili. So 340 00:18:30,800 --> 00:18:34,040 Speaker 5: by nature, Chili is not necessarily the best place for 341 00:18:34,359 --> 00:18:39,480 Speaker 5: growing hazel nuts because it doesn't have enough moisture. However, 342 00:18:39,680 --> 00:18:43,840 Speaker 5: if you manage to provide enough irrigation, then you solve 343 00:18:43,880 --> 00:18:47,600 Speaker 5: that issue. So in Chile, for example, you can grow 344 00:18:47,640 --> 00:18:51,800 Speaker 5: hazel nuts with a much much higher yield than in Turkey. 345 00:18:52,000 --> 00:18:55,840 Speaker 5: You can have huge plantations of hazel nuts, you provide irrigation, 346 00:18:56,440 --> 00:18:58,920 Speaker 5: and then you can get probably five six times more 347 00:18:58,960 --> 00:19:02,520 Speaker 5: hazel nuts per hector of land than in Turkey. And 348 00:19:02,560 --> 00:19:05,320 Speaker 5: this is all this is something that started happening in 349 00:19:05,359 --> 00:19:09,679 Speaker 5: the last several years, and the projection is that Chili 350 00:19:09,720 --> 00:19:12,840 Speaker 5: will become the number two producer of hazel nuts in 351 00:19:12,880 --> 00:19:16,159 Speaker 5: the world in about seven to ten years, with a 352 00:19:16,200 --> 00:19:19,680 Speaker 5: production capacity of two hundred thousand tones a year, which 353 00:19:19,760 --> 00:19:23,719 Speaker 5: still compared to the Turkish supply capacity of eight hundred 354 00:19:23,720 --> 00:19:27,920 Speaker 5: thousand tones a year, is quite small, you know, and 355 00:19:28,000 --> 00:19:34,840 Speaker 5: this just kind of underlines the sheer importance of the 356 00:19:34,880 --> 00:19:37,600 Speaker 5: Turkish market for hazel nut business. 357 00:19:40,000 --> 00:19:42,600 Speaker 3: Do you have any idea why Chili decided to go 358 00:19:42,800 --> 00:19:45,600 Speaker 3: in on hazel nuts. I'm just very curious about how 359 00:19:45,640 --> 00:19:48,959 Speaker 3: they make these decisions, because you know, it's not necessarily 360 00:19:49,000 --> 00:19:51,720 Speaker 3: a completely natural crop. As you pointed out, ChIL doesn't 361 00:19:51,800 --> 00:19:54,520 Speaker 3: have you know, that much rainfall, and so they have 362 00:19:54,560 --> 00:19:56,920 Speaker 3: to do something in order to foster this industry. Why 363 00:19:56,960 --> 00:19:59,400 Speaker 3: did they decide on hazel nuts in particular? 364 00:20:00,240 --> 00:20:04,200 Speaker 5: The initiative comes from the bottom up. So for example, 365 00:20:04,240 --> 00:20:09,560 Speaker 5: the largest hazelnut processor that's based in Turkey, they decided 366 00:20:09,640 --> 00:20:13,440 Speaker 5: to expand in Chile. Right, So it wasn't the kind 367 00:20:13,440 --> 00:20:17,879 Speaker 5: of Chilean government initiative. It was the corporate initiative because 368 00:20:18,080 --> 00:20:20,360 Speaker 5: they looked at many different countries. They looked at New 369 00:20:20,440 --> 00:20:24,200 Speaker 5: Zealand where it's more hilly, which would be more difficult. 370 00:20:24,280 --> 00:20:27,679 Speaker 5: They looked at Latin America, and in Chile, there is 371 00:20:27,720 --> 00:20:34,720 Speaker 5: this great culture of basic of growing agricultural commodities. Right, 372 00:20:34,840 --> 00:20:40,120 Speaker 5: it's industrialized, it's possible to make it large scale, and 373 00:20:40,800 --> 00:20:44,360 Speaker 5: they just needed to add irrigation and that would. 374 00:20:44,160 --> 00:20:46,920 Speaker 4: Be the Other thing is that it provides a very 375 00:20:47,000 --> 00:20:50,480 Speaker 4: nice diversification for them, right because as we're talking about, 376 00:20:50,520 --> 00:20:53,760 Speaker 4: there was a huge weather event that disrupted the supply 377 00:20:54,000 --> 00:20:57,920 Speaker 4: in Turkey. Turkey is the vast, vast majority of the production. 378 00:20:58,160 --> 00:21:00,240 Speaker 4: So for them to have you know, the crop in 379 00:21:00,320 --> 00:21:06,439 Speaker 4: an entire different hemisphere with different conditions pro know provide 380 00:21:06,440 --> 00:21:07,600 Speaker 4: some sort of diversification. 381 00:21:07,760 --> 00:21:10,520 Speaker 2: What do you tell us about that weather event specifically, 382 00:21:10,560 --> 00:21:13,920 Speaker 2: since this seems to be central to your interest, How 383 00:21:13,920 --> 00:21:16,080 Speaker 2: big of a deal is it? Is it a one off? 384 00:21:16,400 --> 00:21:18,840 Speaker 2: And second of all, like give us the overall sort 385 00:21:18,840 --> 00:21:22,960 Speaker 2: of supplied demand imbalance that you analyze right now for 386 00:21:23,040 --> 00:21:23,920 Speaker 2: the hazel net market. 387 00:21:24,240 --> 00:21:28,359 Speaker 5: Every about ten years there's a big frost that happens 388 00:21:28,400 --> 00:21:31,040 Speaker 5: in Turkey. So the previous ones happened in two thousand 389 00:21:31,040 --> 00:21:34,639 Speaker 5: and four and twenty fourteen, and this year there was 390 00:21:34,680 --> 00:21:39,760 Speaker 5: a very very major frost in April which destroyed one 391 00:21:39,880 --> 00:21:43,680 Speaker 5: third of all Turkish hazel nuts. Basically, in a few days, 392 00:21:43,920 --> 00:21:47,280 Speaker 5: one third of the entire crop was destroyed. And frost 393 00:21:47,359 --> 00:21:49,840 Speaker 5: like this, as I said, they happened in once every 394 00:21:49,880 --> 00:21:53,920 Speaker 5: ten years. They are quite one off. But the thing 395 00:21:54,040 --> 00:21:57,480 Speaker 5: is that this year Turkey had a very very warm spring, 396 00:21:57,960 --> 00:22:02,239 Speaker 5: so the hazel nut trees started deloping much earlier, and 397 00:22:02,240 --> 00:22:05,439 Speaker 5: then when the frost happened, they were exposed to this 398 00:22:05,560 --> 00:22:09,320 Speaker 5: huge risk and they got damaged really badly. Now this 399 00:22:09,480 --> 00:22:11,919 Speaker 5: is one thing, so the frost destroyed one third of 400 00:22:11,920 --> 00:22:15,639 Speaker 5: the Turkish hazelnut crop. The second thing is there's another 401 00:22:16,160 --> 00:22:21,959 Speaker 5: small little creature named the marmorated brown, the brown marmorated 402 00:22:22,000 --> 00:22:25,600 Speaker 5: stink bug, which only settled in Turkey in twenty seventeen, 403 00:22:25,680 --> 00:22:29,040 Speaker 5: but it has become so widespread that in a given 404 00:22:29,160 --> 00:22:32,760 Speaker 5: year it can destroy from ten to twenty percent of 405 00:22:32,840 --> 00:22:36,280 Speaker 5: the entire hazelnut crop in Turkey. So we read some 406 00:22:36,400 --> 00:22:40,040 Speaker 5: academic research about it. It was fascinating. So on top 407 00:22:40,040 --> 00:22:42,840 Speaker 5: of the frost, you also have the stink bug. But 408 00:22:43,040 --> 00:22:46,639 Speaker 5: then that's not the entire story. Then there's also the heat. 409 00:22:47,080 --> 00:22:50,840 Speaker 5: And in the western Black Sea region in Turkey this 410 00:22:50,960 --> 00:22:54,640 Speaker 5: year the summer was the worst summer in the last 411 00:22:54,680 --> 00:22:59,320 Speaker 5: sixty five years, the hottest, the driest summer. And what 412 00:22:59,359 --> 00:23:01,720 Speaker 5: does it mean. It means that the hazel nuts that 413 00:23:01,840 --> 00:23:04,720 Speaker 5: did survive the frost, that did survive the stink bag, 414 00:23:05,359 --> 00:23:08,439 Speaker 5: they will not develop as well as they should have 415 00:23:08,640 --> 00:23:12,320 Speaker 5: because they need moisture. The nuts, the kernels, they need 416 00:23:12,320 --> 00:23:15,200 Speaker 5: the moisture. But without the moisture, without the water, with 417 00:23:15,280 --> 00:23:19,200 Speaker 5: this huge like dry, hot weather, they will be damaged. 418 00:23:19,240 --> 00:23:21,439 Speaker 5: They will be underdeveloped, some of them won't develop at 419 00:23:21,440 --> 00:23:23,560 Speaker 5: at at all. So, just to give you some numbers, 420 00:23:23,680 --> 00:23:27,359 Speaker 5: the expectation for this year's crop was seven hundred and 421 00:23:27,400 --> 00:23:31,880 Speaker 5: sixty eight thousand tones of inshell hazel nuts in Turkey 422 00:23:32,560 --> 00:23:36,320 Speaker 5: now after the frost, after the stink bag impact, and 423 00:23:36,480 --> 00:23:39,960 Speaker 5: after the heat, the Ministry of Agriculture in Turkey now 424 00:23:40,119 --> 00:23:43,960 Speaker 5: estimates this year's crop to be at around four hundred 425 00:23:44,040 --> 00:23:47,159 Speaker 5: fifty four hundred sixty thousand tones, which is about forty 426 00:23:47,200 --> 00:23:51,880 Speaker 5: percent lower supply than expected. This is for the inshell 427 00:23:51,960 --> 00:23:55,360 Speaker 5: hazel nuts now kind of going back to this heat. 428 00:23:56,000 --> 00:23:58,680 Speaker 5: If you look at the kernels, then the kernels will 429 00:23:58,680 --> 00:24:02,359 Speaker 5: be impacted even more so. Last year, for example, they yield, 430 00:24:02,720 --> 00:24:05,480 Speaker 5: which is measured as the proportion of the weight of 431 00:24:05,560 --> 00:24:07,840 Speaker 5: the kernel to the to the weight of the entire 432 00:24:07,840 --> 00:24:11,000 Speaker 5: hazel nut, was forty eight percent. This year it will 433 00:24:11,000 --> 00:24:15,040 Speaker 5: be much lower. So the actual hazelnut kernels, which is 434 00:24:15,119 --> 00:24:19,840 Speaker 5: what's important, will probably be in shortage by about forty 435 00:24:19,920 --> 00:24:24,600 Speaker 5: five up to fifty percent this year. So now the 436 00:24:24,760 --> 00:24:28,119 Speaker 5: entire Turkish crop might suffer by forty five fifty percent 437 00:24:28,200 --> 00:24:32,240 Speaker 5: this year, which means the entire global crop of hazel 438 00:24:32,280 --> 00:24:36,240 Speaker 5: nuts might suffer by thirty five percent. And the demand. 439 00:24:36,560 --> 00:24:39,760 Speaker 5: The demand for Turkish hazel nuts is three hundred and 440 00:24:39,760 --> 00:24:44,200 Speaker 5: twenty thousand tones for the export and seventy thousand tones 441 00:24:44,359 --> 00:24:46,960 Speaker 5: for the domestic use, so three hundred and ninety thousand 442 00:24:46,960 --> 00:24:50,920 Speaker 5: tones of kernels. This is kernels, and the production of 443 00:24:51,000 --> 00:24:53,240 Speaker 5: kernels this year in Turkey will probably be half that, 444 00:24:53,880 --> 00:24:57,480 Speaker 5: So we're looking basically at a supply which will be 445 00:24:57,560 --> 00:24:58,480 Speaker 5: half of the demand. 446 00:25:00,000 --> 00:25:02,480 Speaker 3: You know. I have to say that I am unfortunately 447 00:25:02,600 --> 00:25:05,880 Speaker 3: very familiar with marmorated brown stink bugs because they've made 448 00:25:05,880 --> 00:25:07,920 Speaker 3: their way to New England too. Oh really, yeah, they're 449 00:25:07,920 --> 00:25:10,520 Speaker 3: invasive there too, and in the winter they really like 450 00:25:10,600 --> 00:25:12,440 Speaker 3: to crawl into old houses. 451 00:25:12,960 --> 00:25:14,679 Speaker 2: And can they really smell? Huh? 452 00:25:14,720 --> 00:25:17,479 Speaker 3: They if you scare them, they smell, okay, or if 453 00:25:17,520 --> 00:25:20,240 Speaker 3: you kill them and they just sort of fly around 454 00:25:20,320 --> 00:25:23,360 Speaker 3: and make a lot of noise anyway, Okay. The thing 455 00:25:23,440 --> 00:25:29,600 Speaker 3: I don't quite get about this particular investment, I guess 456 00:25:29,680 --> 00:25:33,159 Speaker 3: I understand there's a shortage, a potential shortage of hazel nuts, 457 00:25:33,160 --> 00:25:36,760 Speaker 3: and that could translate into higher wholesale prices, But how 458 00:25:36,800 --> 00:25:40,480 Speaker 3: does that actually feed into higher prices or profits for 459 00:25:40,800 --> 00:25:43,960 Speaker 3: the hazel nut processor, who I assume you know, has 460 00:25:44,040 --> 00:25:46,639 Speaker 3: to pay the higher prices on the wholesale end, and 461 00:25:46,680 --> 00:25:49,080 Speaker 3: then maybe they can charge higher prices for it at 462 00:25:49,320 --> 00:25:53,320 Speaker 3: the retail end, but you know it's not guaranteed that margin's. 463 00:25:52,960 --> 00:25:56,120 Speaker 5: Going to go up. Well, first of all, they have 464 00:25:56,240 --> 00:26:01,240 Speaker 5: some inventory which they have built over the past season. 465 00:26:02,000 --> 00:26:06,119 Speaker 5: And the thing is the processor applies mathematical models and 466 00:26:06,320 --> 00:26:12,320 Speaker 5: weather weather pattern prediction models to manage their inventories. So 467 00:26:12,440 --> 00:26:16,439 Speaker 5: this year, when there was a very very warm winter 468 00:26:16,560 --> 00:26:19,720 Speaker 5: and early spring, they knew that if some kind of 469 00:26:19,760 --> 00:26:22,080 Speaker 5: frost happens, it doesn't have to be a severe frost 470 00:26:22,200 --> 00:26:25,840 Speaker 5: because the hazel nuts already developed quite a bit, so 471 00:26:25,920 --> 00:26:29,520 Speaker 5: if something happens, then the damage will be severe. So 472 00:26:29,560 --> 00:26:33,320 Speaker 5: they managed to increase their inventory. Right, this is one thing. 473 00:26:33,600 --> 00:26:35,399 Speaker 5: The price in the market, of course, will go up 474 00:26:35,400 --> 00:26:38,320 Speaker 5: a lot. We looked at the previous frosts in thousand 475 00:26:38,320 --> 00:26:42,240 Speaker 5: and four and twenty fourteen, so the prices for hazel 476 00:26:42,359 --> 00:26:45,119 Speaker 5: nuts went up about three and a half four x 477 00:26:45,520 --> 00:26:49,800 Speaker 5: from just before the frost to about one year later. Right. 478 00:26:49,840 --> 00:26:51,879 Speaker 5: So if you have inventory and if you hold on 479 00:26:51,920 --> 00:26:54,320 Speaker 5: to it and then you kind of sell it later, 480 00:26:54,400 --> 00:26:57,640 Speaker 5: you make some profits. But also even when you buy 481 00:26:57,680 --> 00:27:01,000 Speaker 5: from the farmers and when there's this shortage of hazel 482 00:27:01,080 --> 00:27:04,520 Speaker 5: nuts in in the world, you can kind of command 483 00:27:04,600 --> 00:27:07,840 Speaker 5: higher margin and the buyers will have to pay it, 484 00:27:08,080 --> 00:27:09,680 Speaker 5: you know, because they have no other option. 485 00:27:09,880 --> 00:27:13,560 Speaker 4: The inventory reported on their Key one financial report was 486 00:27:13,600 --> 00:27:16,439 Speaker 4: one hundred and sixty four million dollars, which is I 487 00:27:16,480 --> 00:27:20,119 Speaker 4: think something like a third of their market cap. And 488 00:27:20,160 --> 00:27:22,760 Speaker 4: that's you know, that's before the increase in prices. 489 00:27:22,840 --> 00:27:25,720 Speaker 2: What is the structural demand story for hazel nuts? So 490 00:27:25,880 --> 00:27:29,439 Speaker 2: again we're telling you know, with the pistachio question, we 491 00:27:29,600 --> 00:27:32,600 Speaker 2: know that whether whether it's the demand that's driving the 492 00:27:32,640 --> 00:27:35,520 Speaker 2: price of the supply, we know that demand has been booming. 493 00:27:35,760 --> 00:27:39,439 Speaker 2: Maybe the Dubai chocolate trend will fizzle out at some point, 494 00:27:39,920 --> 00:27:43,560 Speaker 2: but from we don't know. But for hazel nuts, what 495 00:27:43,600 --> 00:27:46,840 Speaker 2: does the long term structural demand outlook look like? 496 00:27:46,920 --> 00:27:49,919 Speaker 3: Because we already have hazel nuts chocolate, which is already night. 497 00:27:49,880 --> 00:27:52,679 Speaker 2: And it's already been huge, and utella has been a 498 00:27:52,760 --> 00:27:56,040 Speaker 2: staple of the Internet and people talking about it the 499 00:27:56,080 --> 00:27:59,280 Speaker 2: culture for a long time. Is it rapidly growing? Still 500 00:27:59,320 --> 00:28:00,920 Speaker 2: has it plied to what's happening there? 501 00:28:00,960 --> 00:28:04,040 Speaker 5: It's not growing rapidly, but it's still growing. For example, 502 00:28:04,040 --> 00:28:08,880 Speaker 5: from twenty fourteen until now, the demand for hazel nuts 503 00:28:08,920 --> 00:28:12,080 Speaker 5: went up more than thirty percent overall. So I would 504 00:28:12,119 --> 00:28:14,760 Speaker 5: say it's probably like a two three percent a year growth, 505 00:28:15,040 --> 00:28:18,400 Speaker 5: which is still there. So it's it's slow, but it's 506 00:28:18,480 --> 00:28:21,640 Speaker 5: going up. And you mentioned Ntella just wanted to mention 507 00:28:21,840 --> 00:28:27,320 Speaker 5: very interesting fact, so Ferrero Ferrero buys a quarter of 508 00:28:27,440 --> 00:28:32,240 Speaker 5: the entire global hazel nuts supply every year, so so 509 00:28:32,359 --> 00:28:35,800 Speaker 5: it sounds really fascinating, you know that one single kind 510 00:28:35,840 --> 00:28:38,880 Speaker 5: of entity just buys the quarter of the entire supply. 511 00:28:39,320 --> 00:28:41,840 Speaker 3: So one of the really interesting things I think that's 512 00:28:41,880 --> 00:28:44,360 Speaker 3: been happening in the world, certainly since twenty twenty is 513 00:28:44,400 --> 00:28:49,240 Speaker 3: this idea of overlapping emergencies. That's Isabella Weber's term, but 514 00:28:49,440 --> 00:28:52,440 Speaker 3: this idea that you know, something dramatic always seems to 515 00:28:52,480 --> 00:28:54,600 Speaker 3: be going on, and it always seems to be sparking 516 00:28:54,680 --> 00:28:57,400 Speaker 3: some sort of shortage. And we've certainly seen that in 517 00:28:57,440 --> 00:29:00,200 Speaker 3: the world of commodities. And I can rattle off a 518 00:29:00,240 --> 00:29:03,600 Speaker 3: bunch of you know, pretty like niche ones that have 519 00:29:03,720 --> 00:29:08,160 Speaker 3: had some sort of supply squeeze, so coco obviously, orange juice, 520 00:29:08,600 --> 00:29:14,080 Speaker 3: wheat during Ukraine Russia, hazel nuts now, maybe pistachios earlier. 521 00:29:14,560 --> 00:29:18,360 Speaker 3: Would you expect as more of these happen for those 522 00:29:18,400 --> 00:29:22,960 Speaker 3: markets to become maybe more financialized or maybe more easy 523 00:29:23,080 --> 00:29:25,320 Speaker 3: for investors such as yourselves to invest in. 524 00:29:25,960 --> 00:29:30,120 Speaker 4: Well, I don't know about making it easier to invest in, 525 00:29:30,440 --> 00:29:34,560 Speaker 4: but I think that these kinds of events create huge opportunities. 526 00:29:34,680 --> 00:29:39,160 Speaker 4: You know that you mentioned Coco. Coco is really interesting 527 00:29:39,280 --> 00:29:42,440 Speaker 4: because this is actually something that we studied last year. 528 00:29:42,840 --> 00:29:45,920 Speaker 4: We came across a stock which is one of the 529 00:29:45,960 --> 00:29:49,280 Speaker 4: only stocks that you can sort of play Coco, and 530 00:29:49,320 --> 00:29:52,680 Speaker 4: it's listed in Malaysia and it's you know, it doesn't 531 00:29:52,680 --> 00:29:55,840 Speaker 4: have massive liquidity, but it has it has sufficient liquidity, 532 00:29:55,960 --> 00:29:58,920 Speaker 4: and we had noticed last year, of course, there was 533 00:29:59,000 --> 00:30:03,480 Speaker 4: a weather event that caused the coco Coco supply to 534 00:30:04,040 --> 00:30:06,880 Speaker 4: drop by about fourteen percent. You know this is because 535 00:30:06,880 --> 00:30:11,080 Speaker 4: in West Africa they produce seventy percent of the global 536 00:30:11,080 --> 00:30:15,280 Speaker 4: coco supply. You know, we started looking at potential plays 537 00:30:15,320 --> 00:30:18,360 Speaker 4: on Coco. By the time we found this stock that 538 00:30:18,440 --> 00:30:21,600 Speaker 4: we looked at, it had already played out. But what 539 00:30:21,640 --> 00:30:24,720 Speaker 4: we did was we created a case study to understand 540 00:30:24,880 --> 00:30:28,440 Speaker 4: kind of how this timing worked out. What we found 541 00:30:28,720 --> 00:30:34,080 Speaker 4: is actually that the cocoa prices increased several months before 542 00:30:34,320 --> 00:30:36,920 Speaker 4: the stock price had increased. So again it's it's another 543 00:30:36,960 --> 00:30:40,760 Speaker 4: case of kind of an obscure company that people weren't 544 00:30:40,800 --> 00:30:44,120 Speaker 4: really watching, even though there's there's sort of an obvious play. 545 00:30:44,280 --> 00:30:46,320 Speaker 4: The other really interesting thing that we noticed about this 546 00:30:46,400 --> 00:30:50,640 Speaker 4: company is we looked at the insider buying disclosures and 547 00:30:50,760 --> 00:30:54,160 Speaker 4: the CEO and the management. We're buying like crazy the 548 00:30:54,800 --> 00:30:57,880 Speaker 4: stock leading up to or you know, kind of as 549 00:30:58,080 --> 00:31:02,320 Speaker 4: as the weather event and the the coco supply situation 550 00:31:02,480 --> 00:31:05,880 Speaker 4: was was developing. So I'm not sure about you know, 551 00:31:06,120 --> 00:31:08,920 Speaker 4: providing better access, but I think that these sorts of 552 00:31:09,200 --> 00:31:14,760 Speaker 4: global events, you know, can provide really huge opportunities if you, 553 00:31:14,760 --> 00:31:16,200 Speaker 4: you know, if you kind of do the work right. 554 00:31:16,520 --> 00:31:18,520 Speaker 3: But for Coco, I mean, you could just go out 555 00:31:18,560 --> 00:31:20,560 Speaker 3: and buy a future right or I think there's even 556 00:31:20,680 --> 00:31:23,640 Speaker 3: a Coco ETF. Now why not just do that? Is 557 00:31:23,640 --> 00:31:26,800 Speaker 3: that because your expertise is sort of in single stock businesses, 558 00:31:27,120 --> 00:31:29,000 Speaker 3: or you don't want to become a commodity player. 559 00:31:30,120 --> 00:31:33,280 Speaker 4: We're not top down investors. We're very much bottom up investors. 560 00:31:33,520 --> 00:31:37,520 Speaker 4: And so, you know, so when something like this is happening, 561 00:31:37,640 --> 00:31:41,200 Speaker 4: of course you can play the trend of the you know, 562 00:31:41,240 --> 00:31:44,360 Speaker 4: the cocoa price itself, but that you know, that's obviously 563 00:31:44,400 --> 00:31:47,360 Speaker 4: going to also depend on kind of the market dynamics. 564 00:31:48,000 --> 00:31:51,240 Speaker 4: What we find is that there's bigger opportunities in in 565 00:31:51,320 --> 00:31:54,719 Speaker 4: sort of a second order, which is, you know, a 566 00:31:54,760 --> 00:31:58,320 Speaker 4: coco company that's going to benefit, you know, from these prices. 567 00:31:58,360 --> 00:32:01,280 Speaker 4: They're they're earnings, but the earnings bag you know, a quarter, 568 00:32:01,360 --> 00:32:05,880 Speaker 4: two quarters, and the stock really gets rewarded when you know, 569 00:32:05,880 --> 00:32:08,760 Speaker 4: when they start producing the earnings, at least in these 570 00:32:08,800 --> 00:32:11,080 Speaker 4: sorts of markets. You know. That's why we see this 571 00:32:11,240 --> 00:32:14,240 Speaker 4: as as a more interesting way to play it than 572 00:32:14,400 --> 00:32:18,080 Speaker 4: just writing the you know, the trend of the futures prices. 573 00:32:18,640 --> 00:32:21,360 Speaker 2: Can you tell you know, you mentioned finding a random 574 00:32:21,520 --> 00:32:25,320 Speaker 2: cocoa company in Malaysia and the due diligence work you 575 00:32:25,360 --> 00:32:27,640 Speaker 2: have to do reaching out to management. Can you talk 576 00:32:27,680 --> 00:32:33,200 Speaker 2: about the state of essentially IR in frontier markets? 577 00:32:33,280 --> 00:32:33,400 Speaker 4: Right? 578 00:32:33,480 --> 00:32:36,320 Speaker 2: We go to a website like an American big company, 579 00:32:36,480 --> 00:32:38,880 Speaker 2: like a Pepsi or something, and they have this incredibly 580 00:32:38,880 --> 00:32:41,959 Speaker 2: full IR page that has you know, their presentations and 581 00:32:42,240 --> 00:32:45,560 Speaker 2: the number of the you know, the main person, and 582 00:32:45,640 --> 00:32:49,160 Speaker 2: all their earnings, et cetera. How varied is the quality 583 00:32:49,160 --> 00:32:51,560 Speaker 2: of IR in the markets that you look at. 584 00:32:53,120 --> 00:32:57,760 Speaker 4: Hugely varied and so so in the case, you know, 585 00:32:57,760 --> 00:33:01,080 Speaker 4: in the case of this Hazel Nott process, or they 586 00:33:01,240 --> 00:33:06,840 Speaker 4: only have investor relations materials basically in Turkish, which is 587 00:33:07,040 --> 00:33:09,760 Speaker 4: you know, of course you can, you know, if you 588 00:33:09,800 --> 00:33:12,120 Speaker 4: do the work, you can you can translate to this 589 00:33:12,160 --> 00:33:15,160 Speaker 4: stuff easily these days. But but you know, what we 590 00:33:15,280 --> 00:33:19,680 Speaker 4: found over the years is that some companies have very 591 00:33:19,720 --> 00:33:25,080 Speaker 4: good investor relations practices and some don't. And we've selectively 592 00:33:25,280 --> 00:33:30,640 Speaker 4: taken opportunity to basically teach companies how to improve their 593 00:33:30,640 --> 00:33:35,400 Speaker 4: investor relations practices. Basically we give them free consulting, you know, 594 00:33:35,440 --> 00:33:39,560 Speaker 4: after they've become portfolio companies on basically best practices on 595 00:33:39,680 --> 00:33:43,720 Speaker 4: investor relations. What we've seen is that some companies have 596 00:33:43,760 --> 00:33:46,280 Speaker 4: been highly willing to engage with us to improve their 597 00:33:46,360 --> 00:33:50,320 Speaker 4: their investor relations practices. Other companies have have kind of 598 00:33:50,320 --> 00:33:53,240 Speaker 4: shied away from it. And you know, we we actually 599 00:33:53,240 --> 00:33:57,080 Speaker 4: looked at the results of companies that we engaged with, 600 00:33:57,280 --> 00:34:00,200 Speaker 4: and we found that the companies that were willing to 601 00:34:00,280 --> 00:34:03,240 Speaker 4: engage with us, we're three times as likely to see 602 00:34:03,240 --> 00:34:06,360 Speaker 4: their stock prices double in the twelve months following our 603 00:34:06,360 --> 00:34:09,880 Speaker 4: engagement then other stocks that we had bought in our portfolio. 604 00:34:10,440 --> 00:34:13,120 Speaker 4: So it could be on the one hand that these 605 00:34:13,120 --> 00:34:16,600 Speaker 4: recommendations are very valuable. That companies now you know, are 606 00:34:17,000 --> 00:34:20,200 Speaker 4: going out to the market and sharing how great there 607 00:34:20,480 --> 00:34:25,200 Speaker 4: their businesses and investors are learning about that. Another you know, 608 00:34:25,280 --> 00:34:29,160 Speaker 4: another explanation could be that it's a feedback loop and 609 00:34:29,440 --> 00:34:32,600 Speaker 4: that you know, companies that have really great things to 610 00:34:32,680 --> 00:34:35,920 Speaker 4: tell are the companies that you know are are happy 611 00:34:35,960 --> 00:34:38,520 Speaker 4: to go out and talk to the market. Whereas you know, 612 00:34:38,600 --> 00:34:41,279 Speaker 4: if they really don't have great things coming down the pipeline, 613 00:34:41,400 --> 00:34:43,440 Speaker 4: they don't really want to go out and make a 614 00:34:43,440 --> 00:34:44,000 Speaker 4: lot of noise. 615 00:34:44,400 --> 00:34:46,840 Speaker 2: Yeah, Tracy, I had a friend of mine, this is 616 00:34:46,880 --> 00:34:50,040 Speaker 2: like twenty years ago, et cetera, but he was engaged 617 00:34:50,080 --> 00:34:53,239 Speaker 2: in some forms of like frontier market investing, and he 618 00:34:53,320 --> 00:34:56,480 Speaker 2: thought there was like a pretty big alpha opportunity and 619 00:34:56,640 --> 00:34:59,719 Speaker 2: essentially doing exactly what Burton just described. I think he 620 00:34:59,760 --> 00:35:02,200 Speaker 2: wanted told me about I don't know, a change some 621 00:35:02,320 --> 00:35:05,160 Speaker 2: company that owned a lot of gas stations and laos 622 00:35:05,239 --> 00:35:08,040 Speaker 2: or something like that, and the opportunities that it's like, 623 00:35:08,320 --> 00:35:10,240 Speaker 2: can I just like help you build out your IR 624 00:35:10,320 --> 00:35:13,600 Speaker 2: page because your financials are really compelling and was nobody 625 00:35:14,520 --> 00:35:16,319 Speaker 2: nobody even knows about them or could figure it out 626 00:35:16,360 --> 00:35:18,719 Speaker 2: even if they wanted to. Did it work, I don't know, 627 00:35:18,840 --> 00:35:20,919 Speaker 2: but it seems like an interesting idea. 628 00:35:22,000 --> 00:35:26,040 Speaker 3: Okay, So if we look at the past twenty fourteen frost, 629 00:35:26,200 --> 00:35:29,480 Speaker 3: the past precedent, how long did that actually have an 630 00:35:29,520 --> 00:35:31,600 Speaker 3: impact on prices or how long did it take for 631 00:35:31,640 --> 00:35:33,560 Speaker 3: hazelnut prices to normalize? 632 00:35:33,840 --> 00:35:37,280 Speaker 5: So what happened in twenty fourteen. The price started going 633 00:35:37,400 --> 00:35:41,319 Speaker 5: up in March twenty fourteen, right after the frost, when 634 00:35:41,360 --> 00:35:45,960 Speaker 5: the degree of destruction became clear, and then it reached 635 00:35:46,000 --> 00:35:49,800 Speaker 5: its peak at the end of April early May twenty fifteen, 636 00:35:50,000 --> 00:35:53,400 Speaker 5: so the following year, and then by that time usually 637 00:35:53,480 --> 00:35:56,440 Speaker 5: it's quite clear if the new crop of the new 638 00:35:56,520 --> 00:35:59,799 Speaker 5: year will be substantial or not. So in that case, 639 00:36:00,200 --> 00:36:02,879 Speaker 5: was quite a good crop, and the price started going 640 00:36:02,960 --> 00:36:07,200 Speaker 5: down quite quickly. So the price went up over three 641 00:36:07,239 --> 00:36:10,520 Speaker 5: and a half x from March twenty fourteen to May 642 00:36:10,560 --> 00:36:13,720 Speaker 5: twenty fifteen, and then it dropped I would say about 643 00:36:13,760 --> 00:36:17,280 Speaker 5: fifty percent in just one one and a half months. 644 00:36:17,440 --> 00:36:20,120 Speaker 3: So I still have time or to buy nutella before 645 00:36:20,160 --> 00:36:21,040 Speaker 3: the big price spike. 646 00:36:22,160 --> 00:36:24,040 Speaker 5: Yeah, you know, when we looked at it, so first 647 00:36:24,120 --> 00:36:27,279 Speaker 5: there is like a thirty percent spike from the time 648 00:36:27,320 --> 00:36:31,560 Speaker 5: of the frost till August when the harvest starts, and 649 00:36:31,600 --> 00:36:34,680 Speaker 5: then from August to late April there is kind of 650 00:36:34,680 --> 00:36:39,239 Speaker 5: the most of the price increase happens in that timeframe. 651 00:36:39,600 --> 00:36:40,279 Speaker 4: I just have one. 652 00:36:40,239 --> 00:36:43,480 Speaker 2: Last question, and as inspired by a tweet I saw 653 00:36:43,600 --> 00:36:47,520 Speaker 2: yesterday from the Chinese embassy in the US, and they're 654 00:36:47,600 --> 00:36:52,720 Speaker 2: talking about the d desertification that they're doing in China, 655 00:36:52,840 --> 00:36:57,600 Speaker 2: essentially turning desert into arable land. And I'm curious what 656 00:36:57,640 --> 00:37:00,920 Speaker 2: you're seeing if that's something that you're thinking about. I mean, 657 00:37:00,960 --> 00:37:03,959 Speaker 2: we're so used to talk about disruption coming from China 658 00:37:04,000 --> 00:37:07,279 Speaker 2: from a manufactured standpoint, but in terms of its own 659 00:37:07,400 --> 00:37:09,279 Speaker 2: I mean, it has a lot of land, much of 660 00:37:09,320 --> 00:37:12,520 Speaker 2: it historically has not been arable. They're trying to reverse that, 661 00:37:12,560 --> 00:37:15,520 Speaker 2: which you can obviously do if you have sufficient access 662 00:37:15,560 --> 00:37:19,719 Speaker 2: to irrigation technology and electricity, et cetera. When you look 663 00:37:19,760 --> 00:37:23,880 Speaker 2: out in the long term hazel nut supply story you 664 00:37:23,960 --> 00:37:27,520 Speaker 2: mentioned Chile growing, is this going to be a big 665 00:37:27,560 --> 00:37:29,759 Speaker 2: story in more? Is this a story that you're thinking 666 00:37:29,760 --> 00:37:33,120 Speaker 2: about in agg markets, whether hazel nut or general China 667 00:37:33,239 --> 00:37:37,840 Speaker 2: turning itself into a sort of a man made bread basket. 668 00:37:39,280 --> 00:37:42,759 Speaker 5: Everything as possible, but it's a very very long term 669 00:37:42,840 --> 00:37:46,720 Speaker 5: top down trend. So our job is we are emergent 670 00:37:46,800 --> 00:37:50,920 Speaker 5: markets investors traveling the world in search of hidden gems 671 00:37:51,160 --> 00:37:54,160 Speaker 5: through bottom up opportunities. So I mean it's possible, but 672 00:37:54,440 --> 00:37:57,440 Speaker 5: again it's a very long term, top down sort of trend. 673 00:37:57,880 --> 00:38:01,880 Speaker 5: And as I mentioned Chile, it produce double the number 674 00:38:01,880 --> 00:38:05,000 Speaker 5: of hazel nuts they do today in ten years. But 675 00:38:05,040 --> 00:38:07,280 Speaker 5: then who knows what's going to happen to the weather 676 00:38:08,200 --> 00:38:11,080 Speaker 5: patterns in Turkey in ten years, because it looks like, 677 00:38:11,600 --> 00:38:14,400 Speaker 5: you know, the winters are becoming warmer and the summer 678 00:38:14,520 --> 00:38:17,560 Speaker 5: sometimes are becoming drier and hotter, and I think the 679 00:38:17,560 --> 00:38:19,960 Speaker 5: predictability is getting worse. 680 00:38:20,280 --> 00:38:22,960 Speaker 2: Bertand Ivan, thank you so much for coming back on 681 00:38:23,040 --> 00:38:26,359 Speaker 2: odd lots. I've learned a lot about hazel nuts, which 682 00:38:26,400 --> 00:38:27,879 Speaker 2: I didn't know about, and I hear they are good, 683 00:38:27,920 --> 00:38:31,520 Speaker 2: but I still don't know. But now I can't taste them, 684 00:38:31,520 --> 00:38:32,960 Speaker 2: but at least I know something about them. 685 00:38:32,960 --> 00:38:37,240 Speaker 5: Now to us, hazelnuts taste much better than to buy chocolate. 686 00:38:37,840 --> 00:38:39,160 Speaker 5: At least it's much healthier. 687 00:38:40,040 --> 00:38:56,440 Speaker 2: Well, yeah, thank you, Tracy. I think your invocation of 688 00:38:56,560 --> 00:38:59,520 Speaker 2: overlapping emergencies is really app like we're going to be 689 00:38:59,560 --> 00:39:02,279 Speaker 2: doing a lot of these episodes in the future lot 690 00:39:02,320 --> 00:39:04,480 Speaker 2: all kinds of niche commodities. 691 00:39:03,920 --> 00:39:04,480 Speaker 4: Over the years. 692 00:39:04,560 --> 00:39:06,839 Speaker 3: It does feel like that. Yeah, and there are some 693 00:39:07,400 --> 00:39:11,560 Speaker 3: technological solutions I guess can help at the margins. But 694 00:39:11,640 --> 00:39:15,120 Speaker 3: even in that conversation, Burton and Ivan were talking about, 695 00:39:15,120 --> 00:39:18,400 Speaker 3: you know, this Turkish processor. They have weather technology, so 696 00:39:18,440 --> 00:39:21,200 Speaker 3: they had an early sign that the hazel nuts had 697 00:39:21,239 --> 00:39:24,279 Speaker 3: grown you know, big early, which made them susceptible to 698 00:39:24,360 --> 00:39:27,080 Speaker 3: a potential frost and so they started building up their 699 00:39:27,120 --> 00:39:29,279 Speaker 3: inventory and then lo and behold the frost hit and 700 00:39:29,320 --> 00:39:32,399 Speaker 3: they're in a relatively good position. That's good for them, 701 00:39:32,520 --> 00:39:37,080 Speaker 3: but it doesn't expand the absolute supply of hazel nuts, right. 702 00:39:37,480 --> 00:39:40,240 Speaker 2: Yeah, I feel like ag tech is like a really 703 00:39:40,280 --> 00:39:41,320 Speaker 2: interesting story. 704 00:39:41,360 --> 00:39:41,520 Speaker 4: You know. 705 00:39:41,640 --> 00:39:44,600 Speaker 2: We did that episode with the Lental King of Saskatchewan 706 00:39:44,960 --> 00:39:47,279 Speaker 2: several months ago, and I feel like there are sort 707 00:39:47,280 --> 00:39:51,600 Speaker 2: of two different things, because farmers in any country, as 708 00:39:51,640 --> 00:39:55,160 Speaker 2: he noted, are always going to be among the politically 709 00:39:55,200 --> 00:39:58,840 Speaker 2: most protected class. Politicians feel some sort of obligation to 710 00:39:58,880 --> 00:40:02,240 Speaker 2: protect farmers almost always. On the other hand, like any 711 00:40:02,280 --> 00:40:05,720 Speaker 2: other good you know, there's going to at least in theory, 712 00:40:05,760 --> 00:40:10,239 Speaker 2: be opportunities for genuine productivity gains. And if Chile is 713 00:40:10,320 --> 00:40:14,520 Speaker 2: stronger at irrigation, et cetera. It'll be interesting to watch 714 00:40:14,600 --> 00:40:18,160 Speaker 2: the sort of like interplay between like technology that gets 715 00:40:18,280 --> 00:40:23,000 Speaker 2: applied to growing anything, cultivating anything, including in Chile and 716 00:40:23,040 --> 00:40:26,560 Speaker 2: maybe in the future in China, versus the political desire 717 00:40:26,560 --> 00:40:30,239 Speaker 2: and sort of legacy producers to you know, protect the 718 00:40:30,960 --> 00:40:33,280 Speaker 2: small artisan farmer on the hillside. 719 00:40:33,360 --> 00:40:36,120 Speaker 3: Yeah, that's right. There is that tension, and it becomes 720 00:40:36,120 --> 00:40:39,240 Speaker 3: more prominent the more overlapping emergencies that we see. 721 00:40:39,320 --> 00:40:40,920 Speaker 2: I think the problem for a hazel nuts is that 722 00:40:40,960 --> 00:40:43,360 Speaker 2: they're brown, and they could it's just never going to 723 00:40:43,400 --> 00:40:45,200 Speaker 2: go viral the same way because it just does not 724 00:40:45,360 --> 00:40:49,799 Speaker 2: that green. If the pistachio, whether in chocolate or now 725 00:40:49,920 --> 00:40:52,279 Speaker 2: you know, you see them a lot more like on 726 00:40:52,360 --> 00:40:55,799 Speaker 2: top of a croissant, shredded up, et cetera. Like that's 727 00:40:55,920 --> 00:40:57,920 Speaker 2: just made for twenty twenty five in a way that 728 00:40:57,960 --> 00:40:58,919 Speaker 2: a hazel nut isn't. 729 00:40:59,360 --> 00:41:02,400 Speaker 3: Also, sorry, but hazel nut chocolate is already a classic. 730 00:41:02,520 --> 00:41:04,800 Speaker 2: No, yeah, it's sorry, it's mature. 731 00:41:04,920 --> 00:41:08,040 Speaker 3: Maybe someone can come up with green hazel nuts. 732 00:41:08,200 --> 00:41:08,399 Speaker 5: Yeah. 733 00:41:08,480 --> 00:41:10,640 Speaker 2: Genetic engineering, Yeah, yeah. 734 00:41:10,320 --> 00:41:15,040 Speaker 3: That's the next frontier of viral chocolate, making genetically engineered nuts. 735 00:41:14,760 --> 00:41:16,839 Speaker 2: Better looking produce that I mean, that really is going 736 00:41:16,880 --> 00:41:20,880 Speaker 2: to be the key right on. Ironically, any piece of 737 00:41:20,960 --> 00:41:25,200 Speaker 2: produce that photographs well, et cetera is going to be big. 738 00:41:25,239 --> 00:41:27,040 Speaker 2: I mean, this is why people drink Macha. 739 00:41:27,239 --> 00:41:29,080 Speaker 3: Glitter infused hazel nuts. 740 00:41:29,120 --> 00:41:29,839 Speaker 2: Beat okay, happen. 741 00:41:30,040 --> 00:41:30,799 Speaker 3: Shall we leave it there? 742 00:41:30,840 --> 00:41:31,560 Speaker 2: Let's leave it there. 743 00:41:31,760 --> 00:41:34,399 Speaker 3: This has been another episode of the Authoughts podcast. I'm 744 00:41:34,440 --> 00:41:36,759 Speaker 3: Tracy Alloway. You can follow me at Tracy. 745 00:41:36,560 --> 00:41:39,160 Speaker 2: Alloway and I'm Jill Wisenthal. You can follow me at 746 00:41:39,160 --> 00:41:42,759 Speaker 2: the Stalwart. Follow our producers Carmen Rodriguez at Carmen Arman, 747 00:41:43,080 --> 00:41:45,960 Speaker 2: Dashel Bennett at Dashbot, and Kale Brooks and Kale Brooks. 748 00:41:46,200 --> 00:41:48,560 Speaker 2: For more odd Laws content, go to Bloomberg dot com 749 00:41:48,600 --> 00:41:51,120 Speaker 2: Flash odd Lots with the daily newsletter and all of 750 00:41:51,160 --> 00:41:53,440 Speaker 2: our episodes, and you can chat about all of these 751 00:41:53,480 --> 00:41:56,799 Speaker 2: topics twenty four to seven in our discord Discord dot 752 00:41:56,880 --> 00:41:58,320 Speaker 2: gg slash od Lots. 753 00:41:58,440 --> 00:42:00,640 Speaker 3: And if you enjoy all thoughts, if you like it 754 00:42:00,680 --> 00:42:04,000 Speaker 3: when we talk about niche commodity markets and short squeezes, 755 00:42:04,040 --> 00:42:06,520 Speaker 3: then please leave us a positive review on your favorite 756 00:42:06,520 --> 00:42:10,120 Speaker 3: podcast platform. And remember, if you are a Bloomberg subscriber, 757 00:42:10,200 --> 00:42:13,280 Speaker 3: you can listen to all of our episodes absolutely add free. 758 00:42:13,400 --> 00:42:15,360 Speaker 3: All you need to do is find the Bloomberg channel 759 00:42:15,360 --> 00:42:34,640 Speaker 3: on Apple Podcasts and follow the instructions there. Thanks for listening.