Stig Brodersen  05:36

I think it’s really interesting what you said about China, how much they’re accounting for the world growth because I remember years back, I read an article about the Chinese economy, and they were saying that “Well, we are probably going to face some headwinds as we move forward because China is so dependent on Europe and they’re so dependent America.”

As you probably remember back then. You know, no one in America, no one in Europe had any money to spend. And if they don’t spend anything, there isn’t money flowing back to China, which in turn what is happening now is that now they’re devaluing the currency because they have to. They can’t rely on the US anymore. They can’t rely on Europe anymore, so they had to align themselves. And so that’s what you’re seeing that yes, it is a big problem for the States, for instance, that China is in a recession or starting to decline. But I think the Chinese would probably say that we started it because our economy was…

Preston Pysh  06:35

Yeah, absolutely. You’re exactly right. Sorry to interrupt you, so I sent out an email to all of our email subscribers just talking through the high points of what’s happening are my concerns. One of the things that I want to talk about, so don’t let me forget is the spread between fixed income and equities because I think that that’s a really key point to discuss.

But in the email, I highlighted that I had made this video on YouTube back at the end of February, talking about my concerns moving forward. And I really felt like that was a critical point in time for the market where it had reached an all-time high. And so I made this video and I explained why I thought there were issues. And I think one of the main reasons that I really started thinking that we were at a market top back then, which I’m just going to throw out there, it was three days off of the market talk when the video was published, and you can see the date on YouTube.

07:27

But the main reason that I made this video back then was that the Fed had stopped their quantitative easing. When you went back, and I know I’ve said this on the show a few times, when you go back and you look at the number of dollars that the US Federal Reserve was pumping into the economy through quantitative easing from 2009 up until the end of 2014, the threshold of dollars that they were pumping into the economy almost had an exact correlation to the growth in the stock market.

At that point in February, it really looked to me like there was a high probability that the Fed was not going to do any more QE, based on what they were saying in the news, based on everything that was happening. Now, the one thing that concerned me whenever I was saying, “Hey, I don’t think things are going to be looking any better from this point forward back in February.” Europe was doing its version of QE. But you got to realize it wasn’t nearly at the same magnitude as what the Fed had been supplementing the world for five years with their quantitative easing. This is why I really felt like we were at the top and that all this government manipulation that had been occurring up to that point was over and that you were pretty much at the end of that cycle.

I kept thinking back to the Ray Dalio video that he had made, where he’s talking about how spending, and this is getting to Stig’s point that he was making, spending works in this cycle. As long as that spending continues, the next person that the money that you spent goes into the next person’s hand and they can spend more because they have now more in their pocket and it continues.

09:03

When I saw the Fed stop that QE, I really felt like that was the end of what I like to call the waterwheel where it was spinning in one direction and it was slowing down and it was slowing down. And the Fed had pretty much said that they weren’t going to be spending and putting that flow of money into the system anymore. And I felt like it was going to start basically rewinding itself and going in the opposite direction, so far, that thesis has been correct. But that doesn’t mean that the Fed couldn’t do more QE into the future. It doesn’t mean that China could start pumping.

I mean, I just saw an article in the Wall Street Journal before we started recording saying that China’s getting ready to pump more liquidity into the system, so that does not mean that this thing is going to totally reverse itself. I think there’s a lot of momentum behind this. I think there’s a huge amount of momentum behind this. But that doesn’t necessarily mean that it can’t be undone because we’re at that point where you haven’t hit that critical mass, I don’t think, but I think you’re getting there quickly, so lots of things to talk about. Go ahead, Stig.

Stig Brodersen  10:00

Yeah, I love what you said, Preston, about spending because spending that could be monetary. That is what you’ve seen in the stage with QE. That’s also what you’ve seen in Europe. You’ve seen that in Japan for so many years. But it could also be fiscal.

Now, everyone started doing fiscal policy, which basically means the governments start spending more money. Everyone saw that during the crisis, but no one saw that to the same extent as China. Now, I don’t know if I’m going to mess up numbers here. But I think I remember from the book we did from Professor *Kuh, that while it was 5% GDP, the packets that they implemented in the States in 2009, I think it was 17% in China, that the government was just sending into the economy, just to keep it floating. And the interesting thing that happened back then was that there were a few economists that were saying that this could lead to a bubble. But then you have many more people, including economists that would be saying, “We need that right now to sustain yourself during this crisis.”

11:04

And one more thing I just want to point out is that in China, you can’t just let capital flow like you can in the States, for instance or even Europe. Like, if you have the money within China, typically that would be invested in Chinese assets. It’s simply not possible just to invest in everything else. And that also creates some of the bubbles and could also burst the bubble as we might be seeing right now.

Preston Pysh  11:31

So I saw a comment that Jim Rickards had and I really thought this was a great comment. And he was talking about how basically, the world is paying for all this leveraging that they’ve been doing which you watch the Ray Dalio video, he talks about these 75-year cycles, these deleveraging cycles and the way that everyone’s paying for this as they are devaluing their currency. And I think that you’re truly going to see that during this next downturn. When that is, we don’t know. That’s how you’re going to be seeing a majority of this being paid for is through the devaluation of the currency. And that was something that Jim Rickards had said.

12:08

Now, I want to throw this point out there because I found this extremely interesting. In the email that I sent out to people as giving them some ideas, for this for all the email subscribers on our list, I was telling them some of the things that I’m really excited about with this downturn and where I think people can do really well. And one of the comments that we were talking about which sparks huge debate amongst people is gold. And one of the people emailed me back and they said, “You know what, I just recently saw I saw a billionaire Stanley Druckenmiller took 20% of his portfolio and has invested in gold, and that was just recently released in his last filings for I think his Duquesne, Capital Management.

And I found that to be extremely interesting and just so you know, Stanley Druckenmiller, we are huge fans of Stanley Druckenmiller. Not just me. He’s from Pittsburgh, but because he is a fantastic macro investor, he was George Soros, his brainchild when he broke the Bank of England. You want to read about an interesting guy and somebody who’s a really strong macro thinker, look up Stanley Druckenmiller, and you’ll be very surprised at what you find.

But there’s a guy, there’s a billionaire who took 20% of his portfolio and put it in gold. This is just recently like in the last month or so, so an interesting play. I just want to throw that out there to listeners that like gold. I know a lot of the value investors who absolutely hate that play. But that’s fine. I’m just throwing this out there is a general statement for everybody.

Stig Brodersen  13:42

And Preston, I think we all know that when something crazy is happening in the market right now. That is something that you can take advantage of, so I’m actually curious to hear about what is your take on this? Do you think that as a value investor, we should just kick back and enjoy that some of these currencies that we had been looking at for a long time that might be within a region and stopped buying them up at some point in time? Or do you think that we should look at other asset classes? I know this is an extremely unreasonable question for me to ask, and you weren’t prepared for this. But what’s your response to that?

Preston Pysh  14:19

I don’t think it’s unreasonable at all. In fact, I like the question, so this is where I see things, okay. I really think that people that do not have a firm understanding of macro right now are going to have a rough time. And I know I’ve been saying that for a while. But here’s the reason why, so this is a currency issue. This crash is a currency issue, so if you don’t understand how currencies work and how they play with other investment vehicles and securities and whatnot, you’re going to have a rough time with this one. That’s my opinion. I could be wrong now.

That doesn’t mean that I don’t think that the junk bond market is probably going to be the catalyst that makes this thing tumble. But I think that where people are really going to get devoured is they’re going to lose their buying power at the end of all this. And the reason that they’re going to lose their buying power is that like the federal government for the US, mentally they only play the only play. And this isn’t me saying this. This is the Wall Street Journal saying this. The only place they have to devalue the dollar, that’s the only way that they can somehow get out of this. And that’s just not the US because everybody around the world is in a very similar situation.

Now, China has a few interest rates to play with, they can bring those down. Europe does not. Most other countries around the world do not. But don’t get me wrong. I mean, I think China’s going to do both. I mean, you’re seeing that right now where they’re adding liquidity. I don’t know if they’re doing something where they’re buying back some of their fixed incomes, like doing the QE thing, but I wouldn’t be surprised if they did that in combination with lowering interest rates.

15:55

So getting to Stig’s question, so what you have seen over the last year, as you’ve seen commodities absolutely get murdered. And I mean murdered, what are they off? 40-50%, and some commodities even worse than that, so the thing you got to understand about commodities and this is my personal opinion, I look at commodities as if they are currency in some cases like oil, for example. And you heard Morgan Downey say that when he was on the show, he says oil is like a currency. I totally agree with Morgan. It’s a little bit more complicated because you’re dealing with a supply and demand piece of it that you’re not typically dealing with currencies.

But here’s the thing with fiat currencies, that’s how they’re going to solve this problem. They’re going to expand that. And it’s going to devalue, versus it’s always relative to something else. It’s going to devalue itself. That’s why I think commodities are going to be extremely strong plays because they’ve been getting punished because that’s where all this is smushed, in my opinion. The US isn’t wanting to devalue their currency because that destroys the buying power of the US citizens, although it does induce GDP growth, they can’t keep interest rates that low and do QE forever. They’re realizing that “Hey, the longer we keep things this way, we’re creating a bubble for ourselves.”

So you got all these pressures, enormous pressures just pushing up against the US dollar right now. And so I think there’s a concern there, I think there’s a major concern there for the devaluation of the dollar moving forward into the next year. I think that the Fed is going to have to do something to devalue that currency, even though they say they’re going to raise rates, which would make it even stronger.

17:32

So I guess what I’m saying I don’t buy it, I don’t buy it. If they do raise rates, it’s going to be 25 basis points on the overnight federal funds rate. That’s going to be it which is going to pretty much make no difference at all. I think banks will then undercut that because they’re flush with cash and it won’t really make a difference at all. I’m worried about the psychological impact that might have. But a lot of things going on. I’ll be watching commodities extremely closely. I’ll be looking at the futures prices, whenever those go linear with the current spot price one year out two years out, whenever that starts going linear, that’s when I’m going to be probably taking a position and you’re starting to see that get close with oil. Sorry to talk so much, Stig.

Stig Brodersen  18:15

Yeah, so I’m actually curious to hear about this, because when you see these commodities that might have dropped, like in half over the last eight months. And like intuitively, you would think well, that’s probably temporary. You will see that it will increase in price again, so your aim right now, Preston, is that to maintain or protect your principal? Well, I guess it always is for all investors. Is that like, if you can come out over the next say two years with 0%, within the list that we have here in August 2015, is that really the goal? Or do you think that now we see some interesting place available in the market where you can actually profit from the hectic market that we’re seeing right now?

Preston Pysh  18:59

I could be wrong, but I think a zero percent return over the next year would be pretty darn good compared to everything else. And I think that’s how people got to look at it as like, “Hey, it’s always relative to something else.” And so I took a very bold play back in February when I made that video, where I moved a significant portion of my portfolio into cash. And you know what, it’s done fantastically because the dollars in the last year, the dollar has gone up 20%, so I couldn’t be happier with the decision I made. That was a bold play. I didn’t know if that was actually going to pan out. It’s easy for me to talk about it now because it was a really good decision and it worked out. If it didn’t work out I’d probably be one of those people not talking about it too much.

The thing that I’ll tell you is I think protecting your principal is extremely important. I think that commodities are going to be a great play in the future. Not today. I mean, I’m still riding this dollar wave. Why would I get off that thing right now? I mean, it’s the Feds saying they’re going to raise rates. You know how much longer this thing can run, I don’t know, but you better believe I’ll be getting off of it when it does. And I really think that I don’t know. But I think that the play is going to be commodities at that point.

I think that the equities are going to really have a rough year. I really do. And I could, I hope I’m wrong for all the people out there that are holding equities, but I think it’s going to be a rough year. You got this thing spinning in the opposite direction.

20:22

I think the only thing, now this is an interesting discussion. I want to talk about spreads. Okay, so now that the market has contracted, okay, now you got everyone run into the cash play, which, in my opinion, might be a little too late, depending on how things shake out. Well, I want to take that back. I don’t want to say it’s too late but I want people to have an appreciation for this.

Preston Pysh  20:44

So there’s a spread, the difference between fixed income and equities, so as equities went down, the yield goes up. Okay, the lower the stocks are, the higher return you can get, so whenever the market was at 18.3, and I was a little worried. The yield was at like 3.7% or 3.6, or somewhere around in there. Now, it’s contracted 10%, your yield now bumps up to about 4%, or maybe 4.1, or something like that, so the yield has gotten higher.

Now here’s the thing, everyone’s piling in the fixed income because they’re scared. And they’re piling into the 10 year Treasury, so now everyone moves into that the price and the 10 years Treasury goes up and guess what happens? The yield goes down, so now you’re looking at a spread between fixed income and equities that’s around 2%. You’re looking at a difference between two to 4% with between fixed income and equities, so the larger that that spread gets, the more volatility that you’re going to see as traders jump from one asset class to the other because there’s a disparity there.

21:44

When you look at crashes in the past when you go back to 2008. That spread was pretty much non-existent. It was at parity with each other. It was around 5% or whatever it actually started becoming inverted. Fixed income was giving you a higher return. Then equities, you’re not seeing that right now. You’re actually seeing equities still 2% higher than fixed income. That’s a concern for me. That makes me feel like, hey, that trade between fixed income and equities, that back and forth could continue and persist, which could really eat people alive. And as you get out here… Let’s say you get out and you go into cash. That equity market could come back because there’s still that spread that exists where you’re getting 2% higher in equities. That’s my concern for people that are moving into cash.

But this oil thing, and we’ve got to talk about that. Next is this oil thing is a major concern. We’ve brought it up in past shows, but we need to bring it up again. But before we do that, I want to throw it over to Stig because I think he has a comment.

Stig Brodersen  22:40

Yeah, so I’m really curious to see what’s happening now because I have been waiting for what we’re seeing right now. I think the last week, the market dropped something like 6% or something like that. I can’t remember the exact number. But I think the interesting thing is what will happen next. I mean, what will happen in the next few weeks because we have seen we see this bull market, the long term trend has been the bull market, then we’ve seen that somewhat declining market that’s really a lot more, if anything, a stagnant market.

And I was just waiting to see what the catalyst would be, one catalyst that could be the Fed raising interest rates. That’s something that we also covered in the podcast. Another thing could be that for whatever reason, say China or something completely different, you will see a drop in the market. How will investors react to that? I mean, because we had to remember this is the stock market. There’s a lot of psychology involved. I’m really curious to see if the market really starts to decline, how much I mean, how much the call will be there, or if it’s just like a short dip?

Preston Pysh  23:42

So the email I sent out this past weekend for all the people on our subscription list, the name of the email is “Is there blood in the water?” And so my conclusion in that email was that there was no blood in the water. And the reason why I say that is because you’re not seeing any defaults. I mean, you are seeing some defaults but not at the magnitude that would cause this thing to really have a catastrophic collapse, so because I don’t think that you’re seeing that yet. I mean, that could happen next month, it could happen next year, I don’t know. But until you start seeing that large amount of defaults, I think you’re going to see extreme volatility. That’s my opinion, because of this psychological piece. Everyone saw it have a huge 500 points on the Dow on one day is crazy. That’s a huge number. We haven’t seen stuff like that since like 2008.

Preston Pysh  24:28

And I remember summer 2008, the market was all over the place, that thing was sewing in three, four or 500 points a day, up and down all over the place. I think you’re going to see something similar to that. I could be wrong, but that’s what my expectation is.

Preston Pysh  24:42

So with that said, that volatility is up and down. And that tends to really break things. I think of it in the context of about a year ago, I had some issues with my heater, and I was up in my living room and I heard this like really strange wrong vibration like it was really loud and obnoxious. And I said that doesn’t sound right. I walked downstairs and I go in and I see my heater. And the thing is just vibrating like out of control. And so I immediately turned it off. And so I had a fan that was going bad. And I see so many similarities between our physical world that we live in and the market where extreme volatility going up and down at very large swings like that, that has a tendency to break things, and it has a tendency to break things because people are leveraged and then they get called. And then it has this compounding impact. And I think that’s the concern as we go into more volatile times, where I think the market could jump because of that spread that’s existing between the two and 4%.

You’re going to have people jumping asset classes, that are changing their mind because you got fear in the market, you got this psychology piece. And I think that’s the thing that people really got to be concerned with moving forward. But I think the real catalyst and we’ve been saying this is the junk bond market, that’s the thing that’s when you start seeing those defaults. What happens? You got to understand this from an accounting standpoint. This money isn’t disappearing, okay? When the market goes down 10% it’s not like the money disappeared, the money went into a different market, the money shifted over into fixed income shifted into cash accounts, shifted over into maybe a foreign market that had better opportunities. That’s what’s happening here. It’s not like the money is poof, it’s gone.

26:29

Now, whenever you have defaults, that money is poof, and it’s gone because basically, people default on their promise. Okay, credit is a promise, and don’t ever forget that. And our money supply is made up of two things. It’s made up of real dollars, which is our monetary baseline, and it’s made up of credit. The majority of the money is credit. And guess what? Credit is a promise to pay in the future, so when you break that promise, and you can’t do it anymore, poof. It’s gone. It disappears, the money’s no longer there. And when that happens, people write that asset price off. Let’s say the asset was $10,000. And it’s sitting on your balance sheet and it’s listed. It’s a promise. Okay? That thing is no longer worth $10,000 and you have to write it down on your income statement. And guess what? It disappears. It goes away. It doesn’t show up on somebody else’s income statement or balance sheet. It’s gone. That’s when you start to see this thing unravel because the defaults increase, and as that spending cuts back, it unravels itself.

All right, Stig, did you have anything else?

27:35

It didn’t look like Stig had anything. I know we’ve mentioned this in the previous show. The thing I’m really paying a lot of attention to is the oil industry. With these low oil prices now below $40, oil is now like $39 here on the 24th of August. That is going to be an issue as all these oil companies need a much higher price to turn a profit, and a lot of them are highly leveraged. I look for that to be the spot where you’re really starting to see cracks in the dam.

Moving forward, like I said, in the email that I sent out to all of our subscribers, this can sometimes take numerous quarters to play out. That doesn’t necessarily mean that it can’t happen in the third quarter of 2015. But what I want people to have an appreciation for is sometimes defaults take a long time to play out, because the companies can pull off their retained earnings on their balance sheet and live off of those for a few quarters. They can go into more rounds of funding to keep themselves alive with preferred stock, with bonds with credit, whatnot, so be careful. I guess that’s what I’m really telling people is to be careful. Protect your principal. And just be aware that this thing could run longer than you might think before you have a meltdown. But something is coming in. It’s coming quickly. Go ahead, Stig.

Stig Brodersen  28:54

I’m really curious to see the whole industry as you were talking about, well, I’m always curious to see what’s happening in the oil industry, but you’re talking a lot about defaults. Now, if you look at the oil industry right now, and especially the major players, we haven’t seen any defaults. We have seen a lot of layoffs, we’ve seen a lot of strategic changes, which is basically just a fancy word of saying we can’t spend as much money so I guess we have to lay off more people.

Stig Brodersen  29:21

I’m curious to see what will happen, as you’re saying if we can’t keep refinancing our debt? Because if I think back in 2008, I mean, this was also a debt issue. It is a different debt issue, but it was somewhat similar in terms of you could see that some of these companies couldn’t refinance that debt.

So we’re going from a situation as you were saying, Preston, where, like, we can still at least retain the illusion of liquidity and the illusion of having these assets back and suddenly they’re just gone. And what’s happening in this situation, this is why Preston is saying this can happen so fast is that you’ll see a chain reaction. This can go really fast. When if you have one company with bad debt and you’re saying, well that wasn’t as strong as you thought then we will look at all the other that issue the same type of debt, same junk bonds as Preston is talking about. And I think that’s really when you will see the market tipping especially oil business. Like perhaps we need to adjust the capacity in the oil business, perhaps then, and that is something like this that can help you know, making the industry more fitting in terms of the demand side.

Preston Pysh  30:37

Hey, so I want to throw something out there, so these are my personal opinions and everyone knows that I’ve been a bear have with oil since what was in November of last year?

Stig Brodersen  30:47

Yeah, you have definitely been more bear than me because I’ve been bull ever since I guess.

Preston Pysh  30:53

Now I and we talked about this on the podcast. I want to say it was early November. I saw a chart that had the supply and demand of the supply of oil and it was grossly out of whack. And that, for me, was a huge selling point. I sold out of all my oil positions back in that timeframe. I’m very happy that I ended up doing that. And it’s been a great decision. But it was a little scary at the time because oil was still extremely high. It was at a great price. I felt like everything looked good back then. But that’s applying demand on the commodity of oil spooked me.

31:28

Now, here’s my opinion today. Okay, at the end of the summer of 2015. I think oil companies are going to continue to get punished for a while, I think six months to a year. I think they’re still going to be getting punished. And here’s the reason why, so when you look at oil, particularly for the company, they lock in future prices to guarantee certain prices in yields and earnings that they want to get. They’ve locked in a lot of those future contracts that they’re still exercising to this day, so if you went back a year from now, right now in August, let’s say back in 2014 of August, if you bought an oil contract for a year later, guess what? You would have been able to buy it at probably $100 a barrel, would you say, Stig, somewhere around there? Let’s just say $100. Okay, I don’t know what it was, but I’d be willing to guess that these companies locked in a price per barrel of $100 a year ago.

So as they pulled out of the ground right now on the spot price is $39. Guess what? They’re not getting $39, they’re getting $100 if they locked in that futures contract. That’s really important to understand as you think about these oil companies moving forward is because as those future contracts run dry, which I think is probably going to be happening for a lot of them, and especially come around like the October-November timeframe whenever the oil price started really contracting. I think a lot of these companies lock in their price a year out. Some probably a little more than that. But I’d say a year out, it’s probably pretty conservative to say.

So as that timeframe dwindles down and you get near around, let’s call it Christmas timeframe. The price per barrel around Christmas of 2014 was what would you say, Stig, around $70? I mean, I’m really trying to pull these off the top of my head, but let’s just say it was a lot less than 100. Okay, it really started pulling back and I see Stig is looking it up, so the price started pulling back, that’s going to be the best-case scenario that these companies are going to be able to get on the price per barrel as they move forward.

33:35

So here’s my concern with oil companies, as those oil futures contracts start dwindling down, and they’re having to start to rely on the actual spot price of what it’s trading for on the open market. They are going to get punished. That’s my opinion. I could be wrong. But my expectation moving forward is that oil companies have darker days ahead. And I think that those darker days could maybe be to the tune of six months to a year.

Once you start to see the oil price start to recover, I think that they’re still going to have earnings calls where they’re continuing to get punished and that they’re still having a difficult time turning a profit. And remember, folks, these things are traded, these companies are traded off of multiples of their earnings in the short term. I don’t care what anyone says, their trade-off a multiple of their earnings in the short term. And so if we expect that earnings to continue to contract, which I totally do, based on what I just said, I think that they have a lot rougher time moving forward. That doesn’t mean that I don’t like the price of oil as a commodity play. I like that a lot. In fact, I’m getting ready to make a move on that. I’m watching it very closely. But as far as oil companies, I’m staying away from them for a longer period because I think that they have a lot more pull back, if you will, because of the earnings that I expect them to have a very difficult time to have.

That’s my opinion, you might be missing a big opportunity because they have pulled back a lot, but I think they even have more to go. But that’s my opinion. I’m curious to hear what Stig has to say.

Stig Brodersen  35:06

Well, first of all, I have to say that you’re probably smarter than I am because I’ve been holding on to my all positions ever since we discussed this. Basically, since we launched the podcast, and I actually add it to my portfolio in oil sense, too, so I don’t know. People should probably listen you to you and not to me.

Preston Pysh  35:29

Stig I only talk about the things that I do right.

Stig Brodersen  35:32

Oh yeah. I know. I hate to repeat myself, but I’m definitely still bullish on oil. And there are a few reasons for this. I don’t think I think that at some point in time, you’ll see a rebound in oil prices. But first I want to talk about the concept of anchoring. And this is actually like a behavioral finance concept. They will discuss it in one of the later books by Daniel Kahneman because Preston was saying before…

So the oil price back then was like really high, you said something like 100 bucks, something like that. Now, I think that’s really curious because I remember I was looking into, as always oil bagging, I think was back in 2013. And they were talking about, like, this low oil price of only $100. Like, would it really be possible to like to have such a low price of only $100 for such a long time? And that makes a lot of sense why you were saying that because before then, I think it reached a peak of 147 or 148 or something back in 2000. And just before the crash, and you know, that would make a lot of sense. And back then there were a lot of indications that the economy was really going well, everybody was saying that.

So we have a lot of long anchoring terms of what is high oil price versus a low price, low oil price, but I’m really looking at is what is the marginal cost of these all businesses. Now the reason why I’m doing that is that we know that the world needs oil. I would recommend everyone to go back to and listen to Morgan Downey, which we did a few episodes ago he’s much smarter when it comes to oil with Preston and I combined.

Preston Pysh  37:18

Oh, yeah.

Stig Brodersen  37:18

But yeah, but when he’s he’s talking about is that we need to look at the marginal cost since the world needs oil. We cannot live without oil. We can’t sustain a very low oil price for a long time. Because no one can produce at that price. That means no one will supply it, then it’ll come more demand, and then the price will definitely increase. And I think that’s really interesting.

What you’re seeing now is that a lot of companies that back then when you had a very stable or price from like 90 to $100 you actually had that for several years, which is quite unique to have such a stable oil price, within so much small spread. You will see a lot of people, especially in the US within shale oil, shale gas starting to produce a lot of oil because now it was totally safe, it was perceived safe because there was somewhat high and stable oil price, so they were supplying and again that’s a lot of supply, that means that the oil price was going down.

Now, what you also saw was that as always, when you look at the oil industry, you have to put up a lot of cash in terms of capital expenditures. When you explore oil, you have huge, huge cash outlays in terms of setting everything up. When you’re done with that you actually have a somewhat a much lower marginal cost for each barrel that you producing.

Now, the total cost for that barrel might still be $90. But it’s not $90 once you have set everything up, and that means that you have a lot of these producers, it’s still profitable for them to produce at say 60 or $70 There’s even though that the total cost per barrel is said $80. Simply because you know, these costs sunk, we only looking at what does it cost right now per barrel. I’m sorry, I really care about *inaudible there, Preston. But I guess that ‘s my take on oil, so in summation, Preston is bear. I am the biggest bull, as always.

Preston Pysh  39:22

It’s going to be changing here soon though, you got to realize I’m only going to be a bear for so long. And I’ll tell you, I’m getting really close to that point where the commodity and I think it’s really important people understand that the commodity versus oil companies, for me is two totally different things. When I look at the commodity, I’m starting to get really excited about potentially buying into the commodity. As I said, I’ve got major concerns about the oil companies still.

Now here’s something that I really liked about Stig’s point is he’s talking about what’s the cost of pull this stuff out of the ground, because I know it’s higher than $39 as of you know, 24 bucks. And I totally agree with him. I think he’s exactly right. Here’s why I haven’t taken knowing that he’s right on that. This is why I still haven’t taken a play on the oil commodity, these companies and I think you need, you have to understand the context and the history of this.

So back in 2008, when the price per barrel got up to $150 a barrel, these oil companies were making a profit hand over fist, because they were selling it for 150. And it was probably then, it cost them, let’s call it $60 or $50 to pull it out of the ground, and we’re talking globally. Okay, not just… I know the Saudis can probably pull oil out for $25 or $30 a barrel or whatever the case is.

So when you talk about that collective price, and let’s just call it 50 or $60, and then they’re selling it for 150. The margin there is enormous, so what happens when you have a lot of margins? Well, you get a flood of interest, you get a lot of companies that want to start producing oil because they can come in and be profitable, even if they pull it out on the ground for $90 a barrel. That’s exactly what you saw. Okay, that’s exactly what you saw, after the crash up until this point in time. You had a flood of people all pumping oil all competing in this market because of that former price of $150.

Preston Pysh  41:16

So what happens when you have an oversupply of companies, an under demand occurs. The demand has gone up from that point of time, but you got to look at it in terms of the number of people that enter the market were so much more exponential compared to the increase in demand. When you get that offset, that’s what drives the price down. I mean, it’s just simple supply and demand, so that’s where we’re at today.

And now what you’ve got is you’ve got this death spiral of competition where no one wants to give up their market share. And that’s why they’re continuing to produce and continuing to produce because they’re going down with the ship and the last person standing is the one that wins the fight. And then they’re going to gobble up and eat all the companies that weren’t able to sustain their price.

That’s why I said in the email that I sent out this past weekend, I said that the companies that can produce at the cheapest price, that have this have the safest books are the most conservative books and that didn’t highly leverage themselves through all this, are going to be the ones that are last standing, and then they’re going to buy up these cheap assets.

I think you’re going to see this supply and demand invert itself, going into the next cycle. And that’s a really good thing if you own the commodity of oil because that means that if they produce it 60 or $70, you’re probably going to see the price above that point because of the lack of companies that are now in the field. And that’s why I think that I’m going to become an enormous bull, but it’s not today. But it’s fast approaching, so I just want to throw that out there.

Stig Brodersen  42:46

I want to say one thing, Preston the minute you were saying that you’re bull oil I’ll be all over it. That must be a good time to invest in some oil.

Preston Pysh  42:58

But, yeah, I think that the commodity is going to be a fantastic play, especially if the Fed does have to devalue its currency, which I expect in the next year. Who knows what’s going to happen? That’s I think all I have for the current market conditions, I felt it was really important to talk about this as things are really developing here. We’re really thankful for all the email correspondence that we’re getting from people in the audience, just given us amazing handoffs. I can’t thank people enough for some of the information that they’re sending me. And it’s so awesome to be able to take those emails, and then talked on the podcast to everybody else so that everyone can benefit from the messages that you guys are sending.

Also, on the forum as well everyone on the warrenbuffettforum.com, if you go there, you can talk with people in the community. It’s amazing how smart our community is. I feel so blessed to be part of this community. It’s awesome.

43:49

So okay, that was a long discussion. That was a whole lot longer than I thought it was going to go. But let’s quickly talk about the book that we read here. And I’ve got a little story to kick this one-off, so I’m a fan of Tim Ferriss. I think he has some really unique content. It’s really enjoyable to listen to some of the things that he does, but he brought a guest on his show. And the guy’s name was Chris Sacca. I’m sure everyone out in Silicon Valley knows who Chris Sacca is. He’s a billionaire. His net worth is just around 1 billion. And Chris was one of the initial investors in Twitter, Instagram, and Uber. He’s one of these guys that is really more of a creator, I would say. He owns his own venture capital company. And the name of the venture capital company is really quite funny. It’s called Lowercase Capital, which I love. I love that he seems to like you’d have a great sense of humor.

I want to throw something else out before I go. He’s going to be going on the show Shark Tank, so if anyone watches the show Shark Tank and likes that, he’s going to be one of the guest Sharks I think in this coming season. And he’s very outspoken. I think he’s going to be a really fun guy to watch.

44:56

But when Tim Ferriss was interviewing Chris on his show, Chris Sacca commented that one of his favorite books that he had ever read was the book “The Magic of Thinking Big” by David Schwartz, so when I heard that, I immediately wrote the book down. I was like, we are going to read this book, so that’s the book that we’re going to be talking about “The Magic of Thinking Big.” And before we start talking about the book, there was a quick story that I really loved on this interview that Chris had mentioned.

Tim Ferriss asked Chris, he said, “What is the one thing that you look for whenever you’re interviewing somebody that you’re getting ready to invest in their company?” And Chris said, “Well when I first started off, I was you know, I had all these different metrics that I was looking at the finances or whatever.” And I think Chris is a really smart mathematical genius. I think I read somewhere where he was in college, well before the normal kid graduates.

45:51

He said that what’s happened to him is he’s evolved in his thinking of where he invests, and one of the key factors that he looks at whenever he invests in a company is whenever the people that come in and make the pitch, when they come in and they say, and they speak with this confidence, and they say, “Well when the company is at $10 million, this is what’s going to happen. And whenever we have 100 million subscribers, this is what is going to happen next.” And when they’re talking in that context of this is what’s going to happen, for him, that’s like, one of the most prominent things that stick out for him to invest because these people will not only have the confidence, but they can see it happening. They know it’s going to happen. He said, ‘Whenever somebody comes in, and they say, ‘Well, if we get to 10,000 subscribers then or if we could just raise $100,000 we could do more marketing.’” For him, that’s like, “Hey, get out of the room.”

I love that. I think that that is so true. And I think it speaks volumes about basically the thesis of this book that we ended up reading, “The Magic of Thinking Big.” It’s all about believing in yourself and not just believing but knowing that you’re going to do whatever it is that you’re setting out to do. And I think that that’s a really important thing for people to understand. And it really gets to the heart of why I think Chris Sacca has been so successful.

47:25

I want to throw one other thing out here, if you’re not familiar with Chris, The Wall Street Journal said that he’s possibly the most influential businessman in America. Since that time he’s been on Forbes’ coveted Midas list, amongst many other things, so this guy is is definitely an up and rising star and somebody that you’re going to want to pay close attention to.

So with all that said, let’s go ahead and talk a little bit more about the book. We’re going to breeze through this quickly. If you guys want to get our executive summary of the book, it’s about five pages long. Just go to our website, theinvestorspodcast.com and you can sign up for our mailing list. We do not send any spam. We send out the executive summaries and from time to time, I might send out my update on where I think the market is and what I think good investments are, so if you guys want to get that, go ahead and sign up on our list, but let’s go throw it over to Stig and he can kick this off.

48:13

So I had three key takeaways from this book. And I think the first one was probably the most fun one because it was about excuses. And that David Schwartz was the author he called it “excusitus.” I love that word. I need to use that when I’m speaking to my students. He’s saying that unsuccessful people, they have this bout called “excusitus,” that they’re making all these different excuses not to be successful.

Stig Brodersen  48:44

And one of the most, he had like a few different pointers, but the one that spoke most to me was the one about excuses. And he was saying that one excuse, that’s time. People say I don’t have time to do this, and I don’t have to do that. And he actually turned the table on this one. I really like that. He’s saying that when you wake up in the morning, I can remember that Bill Gates, but let’s just say, Bill Gates. Now, Bill Gates, he’s the richest man in the world. He has 24 hours. You do might be a college student, but you also have 24 hours. It’s completely up to you how you want to spend your time. And if you want something done, why don’t you schedule it? Why do you keep talking about doing something, because nothing will really happen for itself? Why don’t you schedule and get it done so that the plan gets done?

And he really talks about this perception of time and how successful people have a different perspective on time. He’s saying that the one thing you should never, ever work with a person that’s saying he has plenty of time. That’s the worst thing you can do is if people have plenty of time, then they won’t have anything done. You know, if you want something done? Give it to this man.

Preston Pysh  50:02

I got a comment on this because this is like one of my biggest pet peeves. I cannot stand when people say, “Oh, I just don’t have enough time.” Like, that drives me nuts. I think that’s one of the biggest excuses in the world is I don’t have enough time. Whenever somebody says that to me, I’m immediately like, it’s like an insect repellent for a bug. Like if somebody says, “Oh, yeah, I just don’t have enough time or I just didn’t have enough time to get around to it.” Like I almost immediately turn them off and like do not even want to have a conversation with them. I know that’s probably harsh and mean, but it’s probably just my pet peeve.

But yeah, I started in the military and just like crazy hours, not sleeping very much. And I guess I gained this appreciation for how much I can possibly get done in a day. And so whenever you see people that are just not really accomplishing too much in a day and then they have the nerve to say that they don’t have enough time, it drives me wild. I obviously don’t say anything, I just keep my mouth shut. But in my mind, I’m thinking, you have probably more time than any person on the planet, so it’s ironic to hear you say that, but I guess that’s me being very negative. And I’m going to stop that. But go ahead Stig.

Stig Brodersen  51:22

Yeah, so I think this is really a question of priority because what he was saying when the saying I don’t have enough time, is that they’re saying, This is not important enough for me. For me, that’s completely fine. I mean, I think it’s okay if people say this is not a priority for me.

Now, my pet peeve anything is that if something should be a priority to them, and they make the excuse that they don’t have enough time? I think that’s really a horrible thing. Because I think that we are all sitting with someone, probably over the glass of wine or beer or whatever, and someone is saying I have this great idea and thinking I could become a millionaire if I did this. And so I would just be saying, “I don’t know, pull the trigger on that one.” And he’s saying, “I don’t have enough time.”

52:09

Now, what I’m hearing is that it’s not important enough for me to become a millionaire. And if I mean, if that’s his point of view, I mean, I think it’s completely fine. But he should probably just be honest with himself saying, “This is why I’m not going to be a millionaire. Better if watch a rerun of Mash tonight, or whatever I’m doing, you know.” And I think that’s completely fine. I’m not saying that becoming a millionaire is the best thing that can ever happen to you. And that’s what you should aim for. I’m just saying that if financial security is something that you’re striving for, you need to prioritize that because that will not happen by itself. It’s actually just very simple.

Preston Pysh  52:49

I like that point. Because it’s not about making a lot of money, folks. It’s not that at all. It’s about accomplishing things that you want to accomplish. You know, so when, and I know I’m probably talking to the wrong audience here because based on the comments we get in the emails and we get in the forum and all that stuff like our audience are achievers. I already know that but I think you guys get our drift and you know, what we’re talking about is that’s a such a great point in this book is when you catch yourself and I know I can be guilty of this at times when you catch yourself saying, “I don’t have time for that.” You really don’t have time? Or is it just not a priority? And I think that’s a great point that Stig brings up.

Stig Brodersen  53:29

My next point is what I call change your thinking, change your life. And the reason why I came up with that title is that that was actually one of the first books, if not the first book I read, it was Brian Tracy, who wrote that about somewhat of the same concept. I mean, don’t get me wrong. It’s not like I’m saying there’s anything wrong with this book that Schwartz wrote, I think is the most recent book, but also think it’s a question of where are you in your personal development when you first stumbled across a book that asks you all these essential questions. I mean, how prepared are you to look at yourself and think I might need to change something in my life that’s not working as it should. And basically, change your thinking, change lives is a great book.

And also “The Magic of Thinking Big” book is saying is that you should visualize it. That’s the same thing as Preston talked about with Chris Sacca, just before. He’s saying that you should imagine that it’s already happening because when you do that, you come up with different answers, you come up with different solutions to a problem. And one example that it’s very neat could be a job interview, I think most of us have been to a job interview, and this is probably not that fun.

But if you visualize yourself being in that job already having the job, you will also respond as if you were, say, stock analyst, not as someone who would like to become a stock analyst, or someone who’s already in stock analyst and then respond according to that. I think that’s that was one of his main points where it’s not just a question of thinking please don’t make that misperception before you potentially read the book. It’s not like, if I just think this, then it will happen, it means you need to do a lot more. You need to take action on this. But everything starts with thinking big first.

Preston Pysh  55:21

So I think it’s really important for people to have an appreciation for the confidence piece, so you can think of it all day long. But if you actually don’t believe it, and you don’t have confidence in what you’re thinking, then it’s totally worthless. I know that’s hard. And so like, there are a bunch of books that complement this one, one book would be thinking Grow Rich talks about this. Another book is the Power of Your Subconscious Mind talks about this. Where through repetition, if let’s say that you want to accomplish something, and it’s a very lofty goal, and you say, I’m going to accomplish x, and you say I have confidence I can accomplish x but deep down inside you might not necessarily believe that.

I think one of the best ways to go about that is to consciously think about that every day, at least once a day, and tell yourself, I have 100% confidence, I’m going to be able to accomplish this, I actually use this technique myself. And when you say that to yourself every single day, every single month, and you keep saying that, you’ll be surprised at how you actually start convincing yourself that you can actually accomplish something. And I think the repetition piece is where a lot of people fail to actually exercise this appropriately, so that’s something that I think is extremely important and something that I think a lot of people miss that key point of the confidence behind saying, “Hey, this is going to happen,” visualizing it, and then actually putting the action to it, which Stig is talking about, which is a completely different animal.

You know, if you’re a go-getter, you’re the person that’s just going to make things happen and you have that confidence like, “Hey, there ain’t anything that’s going to stand in my way from accomplishing this.” Those are the people that are actually the ones that can do it, so it takes a little bit of… you definitely got to change the way you think. But the more you do this, and the more you do it on smaller things, and gradually build up the bigger things, you’re going to be surprised at what you’re able to do.

Stig Brodersen  57:18

The last point I want to highlight is having the right habits and basically, I think that’s something you need to include. I mean, you can’t just, as we talked about before, just think and then things will happen. You also need to take action on that. And clearly depending on whatever your goal is, you will take different actions, but one action that they all have in common is the right habits. And that’s also something Schwartz is talking about something that we stumbled across both with Napoleon Hill, which wrote Think and Grow Rich, you also have stumbled across that with Tony Robbins.

And basically, this is so simple that you might even think why would anyone read a book about this, but it’s actually just so powerful, so one example could be that if you want to accumulate a lot of wealth, well, what should you do? Well, you should probably stop by setting aside something from your paycheck, the same amount every month. I mean, that might just be a simple action to take. Well, if you want to lose weight, well, you should probably start eating healthy in the morning. Have that as a healthy habit, perhaps, if you know you’re always very, very tired in the morning, I know I am. Make your healthy breakfast the day before. I mean, I know this might seem like silly examples, but we need to follow up “The Magic of Thinking Big” by these actions. And he’s saying, don’t worry about what you can take and substitute all those words but actually doing it. And I think that was something that spoke to me too. There was definitely a habit I personally have to break. Like, I need to plan everything because what gets planned gets done.

Preston Pysh  58:55

I think it’s important that you can think really big and I think that’s the point of this book is go after that thing that you think is might be just completely out of your league, go after it, think in that direction. But for a lot of people, you can all think really big. And you can also think small at the same time. And you can train yourself. And I think that’s what Stig and I are really trying to get at if, if you’re not comfortable with just thinking about accomplishing something huge in your life, you can still have that goal and simultaneously try to do something small to start bridging that gap. And to start training yourself and get in the habit of thinking big and learning how to basically train yourself to think in an appropriate way to accomplish big things. That’s what he’s really getting at.

59:39

There’s one final point that I want to highlight that I really liked in this book. There’s a chapter. It’s chapter 12. It’s called use your goals to help you grow, so I use this one all the time. Whenever I come up with a lofty goal. I start telling people about it. And the reason I do that is that I put momentum behind myself to actually follow through with that because if I don’t follow through with it, people are going to be like, that guy talks about doing things, and then he never does it. And so I think that you actually have a big advantage by talking to your family. Maybe it’s people that you feel a little bit more comfortable with initially. And then going from there maybe being a little bit more adventurous and talking to people you don’t know. And tell people about your goals, these lofty, big ideas, talk about it, start making it real because when you start talking about it, people are going to be looking at you to actually follow through, you’re going to be much more likely to follow through. When you have 10 sets of eyes looking at you saying, “Hey, I thought you were going to do that thing.”  I’ve used this in the past and boy does it work. It definitely keeps you motivated and keeps you moving in the right direction, so that’s one thing that I wanted to highlight from the book.

Tons more stuff in this book that I think is great for a person who’s maybe just starting out. I think this book would be great for somebody who’s maybe in college getting ready to graduate. If you’re a person that’s accomplishing big things already, you might find a lot of the information to be stuff you already know. I thought it was a good book. I read it fast. I can’t really say that there was a lot of stuff in here that I hadn’t read in other places in other books. But for the person who maybe is not a big reader, maybe hasn’t read some of the other books we’ve talked about, this would be a great book for you to get motivated and start moving in that direction, so we enjoyed it. It was good.

Preston Pysh  61:28

Stig, did you have anything you want to highlight? Just a general comment about the book?

Stig Brodersen  61:32

Well, I think it was a neat book, too. I should think that we’ve mentioned this when we’re talking about Think and Grow Rich, which was basically the first sort of “Don’t have any excuses. If you want success. It’s up to you.” And what you see right now in the literature is that you will see a lot of the same points and that’s also the same as Preston was saying that if you haven’t really looked into this, it’s definitely worth a read. If you read like four or five different books from Brian Tracy, Tony Robbins, all these guys, I don’t think that you should you don’t have to go out and buy this. A lot of the same points.

Preston Pysh  62:05

Yeah, I wouldn’t be surprised if David Schwartz was highly influenced by the book “Think and Grow Rich.” You could see a lot of parallels in the writing and some of the ideas. But okay, let’s go to a question from our audience. And this week’s question comes from Pramu.

Pramu  62:20

Hey, Preston Stig is promo here. And I would just like to start off by thanking you for providing such a valuable podcast worldwide. You know, I’m 17. I’m living in Australia. I think it’s great that you guys can simplify most concepts down so that you know anyone with sufficient knowledge could really follow along, which I think is actually brilliant.

My question to you both is that Warren Buffett has accumulated nearly $68 billion and has returned about 20% in a very long run of investing. Do you guys think that for the next great investor to be called the best that ever was and eclipse Buffett, they will need to accumulate a greater sum of cash aka in total net worth, or return a greater percentage or rate of return in a similar or longer period investing? Or do you guys in fact believe that it’s a mix of the two?

The second part of that question is that do you guys think that there’s someone out there right now like possibly a Ray Dalio let’s say? Or have we still not found the next great investor who will be able to produce such great results over time? Thanks for your time and keep up the good work with the show.

Preston Pysh  63:21

All right, Pramu, so an interesting question. It’s something that we’ve thought about ourselves a little bit. And I definitely think that you’re on track there, I think somebody would have to have a similar return yield or dollar threshold. That’s the hard part with the inflation piece you know, the next person emerges 20 years from now you got to account for the inflation and that’s where it’s hard to compare apples and oranges for a lot of people because they only think in real terms of the dollar, so that’s where it might get a little bit tricky, but I think for the most part you have and this is a part that I think a lot of people don’t realize is Carl Icahn. I think his annual return is actually higher than Buffett’s. But his net worth is significantly lower. And he obviously hasn’t been getting that return for the same duration as what Buffett’s been getting.

So there are guys out there that are very, very good investors. I think Warren Buffett’s soaks up a lot of the attention. And a lot of these other guys go unnoticed, which I think is a little bit sad because they have some amazing insights and some amazing feedback. But I think a lot of people just whitewash it and only focus on Buffett and think that that’s the only way to invest. And I think something interesting to talk about is if somebody had a net worth of $50,000 versus $20,000, you would say, yeah, there’s not all that much of a difference between those two people. And really, that’s what you’re getting at with these billionaires.

I mean, Buffett, he’s worth $68 billion today and Ray Dalio he’s I want to say 16 billion or something like that. Other people there are in the hunt, and they’re not really that much for behind them. And so I think it’s really important to really give a lot of those people some attention and the respect that’s due because they’ve accomplished huge things. They’ve added tremendous value to the world. It’s a good question. I don’t necessarily know whom the next person is going to be. But a lot of it’s going to come down to how well people play this next downturn, because this one’s an anomaly, in my opinion.

Stig Brodersen  65:22

I don’t know what exactly the right equation is to determine who will eclipse Buffett. For one thing, it’s a question about a return. And it’s actually interesting to see that a lot of people are having like, great long term results. I’m thinking there shouldn’t have been Simpsons, which was the old manager at Geico. I think they actually had a similar record to Warren Buffett.

It’s really interesting because one thing is like the return you can get another thing is how much can you beat the market? I think it’ll be really hard to compound for anyone 20% over the next say five years, I think it would extremely difficult. There have been times clearly where Warren Buffett is somewhat older, so he will have like both times when it was really hard and also times when it’s really easy to propound that, so I think that’s something to look at.

But real return, it’s definitely something. Also how much they beat the market, so for instance, you would have 17 years, but Dow basically didn’t move at all from 64 to 81. It’s really, really hard to make 20% if the markets don’t move, and then you have other periods where it compounds for like 10-15% for everyone just holding the market, so I think it’s really hard to to to have this equation.

66:38

I think what Warren Buffett has done really well, that’s also why he’s made so much money, right by picking stocks is that it’s not all about picking stocks. It’s also about having the right leadership skill and having the right organizational skill that you can set up something like Berkshire Hathaway that you can compound your own money, but you can also compound other people’s money. I think there’s a lot to it. And then just a final point about here, before we had to talk about the next, Warren Buffett is that Warren Buffett had the huge advantage of not having any money at all, so since he didn’t have any money, it was easier for him to compound to so you might have like the next greatest investor, but he’s very, unfortunately, to have inherited $1 billion he can’t compound the same rate, even though he might be as skilled as Warren Buffett, so it’s hard to come up with a question and there was a long way to say I don’t know.

Preston Pysh  67:36

Yeah, I think that Warren Buffett, I know me personally, I’m attracted to Warren Buffett more because of his morals and because of him as a person than I am of his ability to pick stocks. And I think that you’d find a lot of value investors that would probably share that opinion. And I think that’s one of the reasons why he’s looked at with such a strong eye, not just because of his net worth, but because I think a lot of people genuinely respect him for the way that he runs his businesses and just interacts with the community.

And I agree with Stig I think when you look at Ray Dalio, it’s hard to really understand his approach where Buffett talks about the simplicity of his approach and his shareholder letters and all those kinds of things, so that adds to the allure, if you will, of Warren Buffett.

So I don’t know if we really answered your question very well, probably not. But I think that it was fun to talk about it, so hopefully, everyone in the audience enjoyed that. But if you have a question, and you want to get your question played, like Pramu, go to asktheinvestors.com, and you can record your question there. And if you get your question played on our show, we’ll send you a free signed copy of our book, the Warren Buffett Accounting Book.

68:41

So we want to thank everybody for joining us this week. If you’d like to receive our executive summary of “The Magic of Thinking Big,” make sure you go to our website, theinvestorspodcast.com, and you can sign up for our mailing list, which we send out two emails a month and we do not send any spam, so great to have you on there. Thank you so much to our community for everything you guys do for us and we look forward to talking with you guys next week.

Outro  70:56

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