Tobias Carlisle  6:11  

So it’s a great question. If you look at the Humana transaction right now, so you can work out at, say $175, which is close to where it was, recently, as we’re recording this, bid’s at $225. So you work out that there’s about $50 in gain over $175 that you have to put up. Then you would want to look at what is Humana worth without the bid going on. And there are a few different ways that you can do that. Basically, you try to calculate intrinsic value for Humana and then you’re saying, if I can buy this, and my downside sort of where the intrinsic value is, then this is a good trade because I can potentially lose whatever it might be. I can gain whatever it might be. So, I really like Humana. So we put Humana on at the start of the year when the Treasury blocked the tax inversions. So you might remember that there were companies that were trying to move their headquarters overseas by being reverse acquired by an overseas company that would get them into a more favorable tax jurisdiction. Treasury blocked those. So it particularly bought the Allergan-Pfizer deal.

Stig Brodersen  7:19  

I’m curious about this Toby, because I had a chance to look at Humana, Inc.. I also read some of the reports in terms of the problems with the merger because it has to be approved. And there have been some noise about that. And it seems to me that it’s not as transparent, I guess, as I would like to have that. And when I look even closer at the company and look at the difference between GAAP and non-GAAP earnings and seeing the potential for unlocking value, and we go into that level of thinking. I’m just curious to hear that when you say special situation, is that like a one time thing in terms of putting a somewhat significant portion of your capital into that stock? Or is it more like, you think in general, this approach is good too, that’s why you want to diversify into 20 different stock picks?

Tobias Carlisle  8:14  

There’s a few things going on. This is a risk arbitrage. And so risk arbitrage is not a true arbitrage. In a true arbitrage, there’s exactly the same asset trading in two markets at different prices. And you can trade to take that typically tiny little difference between the two. This is risk arbitrage where there’s a future price that you expect. There’s a present price that you know, as well, but you’re not certain of the future price. So you’re taking some risk when you put this on. And what I said before, Buffett book that the returns to deserve a long period of time. What he was saying was, he was looking at ones that didn’t work and that got busted apart. And the ones that did work and made a gain on an annualized basis. And then he found that the average of all of them was about 20%. So, you have to have some expectation that this can fall apart *inaudible*.

So the reason that we liked it when it first blew apart, it blew apart in sympathy with all of the other merger arbitrage transactions that were going on at the time. And so we looked at it and we said, well, this is not a tax inversion, which was crucial. If it’s put together, it will only be the third biggest in the nation. So it’s unlikely to be blocked for trust purposes. And we put a pretty big position on it closed up. And then we took some of the position off subsequent to that, and this is probably what you’ve been reading. The DOJ *inaudible*, which is in control of antitrust type issues, which is anti-competition issues, raised some questions about the transaction. So the reason why you can get such a big return right now is because there’s some risk that it doesn’t complete. 

Preston Pysh  9:44  

Hey, Toby, do you have anything that you’ve written on your process or how you’ve thought about finding opportunities like this in the market? Because if so, I’d like to put that in our show notes so that if people that are listening to this conversation want to kind of learn more about it, they can read more either on one of your sites or maybe something that you’ve written for Forbes or whatever.

Tobias Carlisle  10:05  

I don’t have anything right now, but I’ll prepare something for you.

Preston Pysh  10:09  

So whenever this launches, and if it’s not there immediately, maybe check back a week later into our show notes. And eventually Toby might write something for this that if you guys want some more information, we’ll have a link for it in our show notes.

Tobias Carlisle  10:22  

Stig, I can give you a little idea about the way that we think about it. So let’s assume that we don’t know the likelihood that a transaction like this completes. Let’s say it’s 50/50. I personally think it’s a little bit better than that. But I don’t think it’s much better than that. So let’s say it’s 50/50. So the first thing that we did was look at the downturn. Humana is already on the Acquirer’s Multiple website in a large cap. It’s sort of $26 or $27 in large cap *inaudible*. It’s trading less than nine times Acquirer’s Multiple. 

It’s a stock that I’ve held for a long time. A solid 12 months ago when it was announced. But I’d held it for still six years before then. And one of the things that I really like about them is through that entire period, they were really cheap, though in my screen for most of that period. And throughout the entire period, they bought back a material amount of stock, which substantially bumped up the price to every year. Even though it was cheap, it was up quite substantially. So at the end of that period, it got a bid from Aetna. So as part of the bid, there’s a standstill agreement on the buyback. So if they’re unable to do a buyback for about 12 months, all of that cash is built upon the balance sheet, in addition to that.

So it’s a $26 billion market capitalization. They’ve got a few billion dollars in cash there. So the best case scenario on the downside is that it’s blowing apart the trades down really far. And then they’re able to buy back a gigantic amount of stock at that level. And that will concentrate the remaining intrinsic value into fewer shares, which is a good thing if you’re a holder. But more likely, I think is that it probably does get taken out and so at a $175 you’re upside is $225-ish. 

Stig Brodersen  11:58  

Toby, I would really like to continue the discussion talking about the downturn here because depending on which metrics you’re looking at, it’s not necessarily an expensive company, as you also saying, like, what’s the downside? It’s trading at .5 price sales right now. But I’m also thinking, opportunity costs, say that the deals fall through. It might take years before that catalyst can really be activated in terms of the fundamentals. How do you look at that in your portfolio? Is that a concern for you?

Tobias Carlisle  12:27  

That’d be great if that happened. It’s a stock that I’ve held for a really long time and I really like management. So I’d be more than happy for this to get sold down a long way. And then for them to go back to their old trick of just buying back stock. In a material sum, every year they spend a lot of money on. So they have the free cash flow there. Typically the way that you value insurers like Humana, or Aetna is by book value. So they’re trading at a premium to book value but they’ve got a very liquid balance sheet plus lots of free cash flow. If you used to buy stock systemally for a long period.

Preston Pysh  13:02  

So this is perfect because this leads into the topic that I wanted to talk about which was insurance. So I’m going to go ahead and throw my question out there right now, since we’re talking about this idea. So my question revolves around a lot more of larger insurance companies like a Geico, if you will, and what impact in long term impact that’s going to have just across the entire insurance complex in the United States and Europe and Japan and where everywhere else you’re seeing these zero-rate policies. 

So I remember distinctly when we were out there at the Berkshire Shareholders Meeting, and Buffett was talking about how competitive the insurance industry is, and how they practically have to underwrite at a loss in order to remain competitive. And then they basically take all the float or the money that they’re sitting on and they reinvest that in order to be profitable. So as we look at that model, we see the fact that interest rates are at nothing. So now he’s being forced, and I’m speaking specifically of Buffett but this could be applied to any insurance company. They’re sitting there, they’re not making any money on the upfront underwriting. But now they’re sitting on all this money and they’ve got to invest it, and there’s nowhere to go in order to get any kind of yield except for the equity market. What is the long term impact of that? 

And more importantly, if interest rates go up, because let’s say that they do have some things in fixed income bonds. And interest rates actually do go in the opposite direction and start going up. Whenever that might happen. They’re going to get obliterated on their float. Their float is now going to turn into a huge liability at that point. When I look at the Berkshire model, and I see that, that’s really the main source of operating revenues. And this is another point Mohnish Pabrai, and this goes back to what was it our second interview with you Hari, where we were talking about Mohnish Pabrai. He was gonna basically take the Warren Buffett insurance company model, create a holding company, and now he’s not doing it. And I can’t help but think the reason that he changed course and he’s not going down that path is because of this disaster that I just described in the universe of insurance policies and insurance business.

Hari Ramachandra  15:20  

Not only that, there is one interest rate environment. But also in a recent discussion, you said, after working with one insurance company, he did acquire one property and casualty insurance company. And after working in that industry for some time now, he has realized that that’s not the way he wants to make money.

Preston Pysh  15:42  

But for me, when I’m looking at that industry, that’s not a place I really want to be sitting long term. Just because of where rates are at and the expectation that rates will go up someday. You can’t keep these things negative, or at least I don’t think you can. That’s my opinion. Maybe I’m completely missing the boat here. But I think that these things are gonna normalize. And when that happens, I just think it’s gonna be a very, very difficult time for some of these companies.

Stig Brodersen  16:10  

Yeah, I think it’s super tricky, because to really analyze an insurance company, and though we’re talking about this, like in general, but the balance sheets of insurance companies are very different. And they’re also very complicated, that’s another thing. But they’re very different in terms of the concept of duration. And the reason why that is important is that what Preston talked about before in terms of bonds and the price of bonds. Because you need to have some sort of matching. I mean, this is an illustration thing, actually, it’s not investing thing. You need to be able to match the claims that you have, and then the funds that you have. Otherwise the insurers can’t, in the end not be insured. So, depending on which type of insurance company you have, you might not be exposed to the same type of interest rate risk as other insurance companies. So that was the first thing I want to add. 

Another thing was actually what Toby said before in terms of valuing insurance company, which traditionally, is you’re looking at the price to book because the way the accounting works for insurance companies is that it’s really a month-to-month kind of thing. So whenever something is priced at $100, it’s on the books for $100. And that’s just really, regardless of whether or not it’s overvalued, or undervalued, that’s just the way it is. So that’s another element. I don’t think it’s a bad metric to use necessarily. But I think once you really have the respect for the current market conditions in terms of using that metric. 

I know I briefly mentioned price to sales before, that’s not necessarily because it’s the better metric because it also has a lot of drawbacks. Especially because the sales or the premiums are not necessarily a good thing right now, as Preston also talked about before. Because if you’re basically just losing money to underwrite an insurance, and you can’t really invest that type of money, that’s not something that you should look for. So, I know I’m not coming up with like, “oh, so this is how you should invest in insurance stocks because I don’t necessarily think that’s the best thing”. But I just wanted to put that out there in terms of if you’re reading literature on insurance, that’s just some of the factors that you have to be especially careful about in the current market conditions that you might not be as relevant if you have like a book that’s 10 years old.

Preston Pysh  18:22  

I quickly want to throw out here, just the number for the audience to hear. I’m looking at the Berkshire Hathaway Shareholders balance sheet. And I’m looking at the cash and cash equivalents account. And it’s showing $72.6 billion in cash and cash equivalents right now for Berkshire Hathaway. So when you think about that enormous sum, I mean, absolutely ginormous is the word I’m going to use. And you’re looking at the yield that he’s getting on that, it’s totally insane here in the fall, if you will, at 2016.

Hari Ramachandra  18:59  

For an average guy who is not a professional investor, I just want to park it in a safe place. A lot of people used to say real estate investing is a hedge against money printing, but looking at the asset prices now, especially if you come into Silicon Valley, it feels like it’s in its own bubble.

Preston Pysh  19:18  

So this is my comment on real estate. And I really want to hear you guys shoot some holes through this. So I think that the concern with real estate is as interest rates go up, let’s just say that this 35-year bond bubble actually starts to go the other way. If interest rates would start increasing, that’s going to be just catastrophic for any type of tangible assets, call it real estate. Because interest rates in the price of assets move in the opposite direction. So I think that if you’re dealing with real estate that’s in the high end market, meaning you only have a small group of people that can actually afford the price of call it a multi million dollar house. I think real estate in that category is going to have a very difficult time. If you see interest rates start actually going in the opposite direction. I’m talking long term here. In the next three years or in the next two years, I don’t see this stuff playing out. But I’m talking long term like if you’re going to buy a house for 30 years, I think that that’s a concern that you have to have if you own it outright. If you’re buying that and you’re highly leveraged, and you can continue to make the payment on that, well, then you’re going to do really well because you don’t actually own the house. The bank does and they’re going to get tour up as interest rates go up. 

So, that’s my two cents. So if you’re going to buy commercial real estate, or rental properties. Let’s say you’re going to buy an apartment that has 10 units in it or whatever. And it’s supporting a lower income family or individual person renting from you. I think that that’s going to weather this a whole lot better simply because you’re going to have a larger pool of potential people renting or using that space. If that, I’ll call it catastrophic event where interest rates start going up occurs, I think you’re going to be better protected for it. That’s my two cents.

Tobias Carlisle  21:13  

I hear everybody saying that it’s very difficult fun stuff to invest in. But I can’t find a lot of stuff to do at the moment. Crucially, a lot of stuff in that kind of workout type basket where you’re not looking to hit a home run that sales out a stadium. I can find lots of ways that hit singles. We might look to sell an option on something looking for ways to sort of play the market against itself. So if there’s a lot of fear in something that’s cheap, we might sell an option. Sell a put option in that which for those who are not familiar, it’s sort of if you sell a put option in something. You’ve got a risk profile that looks like you’re getting on the equity. So basically, you’ve underwritten the equity. So if you’re a deep value investor and you’re comfortable buying the stock, should be comfortable selling an option. And the advantage of selling the option is that you have a sit period of time before the option expires, and then over that period of time, you’re basically saying I agree to buy the stock. Surprise. And in the event that you don’t have to take the stock, you’ve got the cash flow coming in, and then the liability drains away to the day of expiry. So that’s one way of generating returns. It requires some sophistication there.

Preston Pysh  22:21  

So Toby, I’m really curious about a specific point to this. What kind of term are you looking for on that option?

Tobias Carlisle  22:28  

Whatever generates the best annualized return is the way that I look at it. So I don’t really mind if it’s a quarter out, or if it’s three quarters out, or if it’s 18 months out. But typically what happens is I’m looking for stocks that are in some sort of crisis going on. So in that crisis, stock goes down. And the put option price swells up, it becomes quite volatile. So when you get those two things working together, you get a rich option on a cheap stock. So I’d be happy to buy the stock at level when the option just gives me another buffer again. And the chances are that it turns around and you’re getting paid. So typically, it’s sort of I’m looking 3, 6, or 9 months out, whichever one gets me the best annualized return.

Stig Brodersen  23:11  

And what kind of annualized returns are you looking for right now, Toby?

Tobias Carlisle  23:15  

So I’ve got this threshold that I use. I don’t want to say that this is going out and getting this kind of returns. But in terms of annualized returns, like I would want 35% to 40%. It depends a little bit on the underlying. If I really want to own the company, if I want to own the shares, and I’m just kind of doing it as a proxy as a way to get into a little bit cheaper, I might look at about 25%. If it’s something that I’m sort of more interested in option trade, I want it to be sort of 35% to 40% plus.

Stig Brodersen  23:43  

Wow, super interesting. I’m really happy I had a chance to talk about both options and special situation. It is something that recur a few times but don’t really have gone into depth with. So for the next thing here on the agenda, let’s shift gears a bit. And, Calin, I know that you have an interesting question.

Calin Yablonski  24:02  

It was along the same lines as Hari’s question. It was more to do with as a retail investor, somebody who likes dollar cost averaging as a strategy, is now a good time to implement that strategy?

Preston Pysh  24:16  

So I like this question. And I think it really applies to a very large amount of the listeners on the show. I’ll be honest with you Calin, I’m frustrated. I’m very frustrated. I’m looking at the Dow Jones Industrial Average over the last five years. Since the time Stig and I started this show back in the end of 2014. Do you know what’s happened on the Dow Jones Industrial Average between that period of time to where we’re at right now? And I’ll just answer the question. It hasn’t moved at all. From a price point. It literally has not budged. Maybe not even a percent since the time we’ve been doing the show. And so if you own the index, let’s say you own the S&P 500 index, your money to be made was simply on the dividend alone during that period of time. So I don’t know what the average dividend is at these prices, but I would guess it’s, what, a percent, maybe less? 

Tobias Carlisle  25:11  

I think it’s about 2% at the moment. It’s on the S&P 500. I’m not entirely sure on the Dow Jones Industrial Average, but it’s 2% on the S&P 500.

Preston Pysh  25:19  

Okay, so it’s a little higher than I thought. 

So that’s been the gain. And so I’m going to kind of bash the financial news a little bit. I can’t understand how people can go on, on a daily basis, and just continue to really kind of provide good long term guidance. That’s really kind of a value-based approach where you buy and you hold. And really kind of changed too much of their line of thinking because we really haven’t had any major change in the entire two years that we’ve been doing the show. So my guidance would really kind of be tell people to continue to be very conservative. Protect your downside risk. I think there’s so much downside risk. And I’m talking from the big picture here. A lot of the stuff that Toby’s talking is much more micro focused. And you really, really got to know what you’re doing if you’re implementing some of those strategies. And I think for a lot of people, they don’t have the time to be doing that, or they don’t know somebody that they trust enough to give their money to in order to allow them to be doing some of those things. 

And so, if you’re just trying to implement a good buy and hold strategy, I would tell you that you need to be very careful, because you do have billionaires like George Soros, who makes all of his money on macro plays. And he is shorting the S&P 500 right now. And you’ve got Warren Buffett’s sitting on $72 billion of cash. So I mean, there’s guys out there that are doing some very defensive things, in my opinion.

Stig Brodersen  26:51  

And the thing to add is that the 2% is really not that interesting, because what you also need to add to this equation is really the downside risk that that Preston also talked about before. You need to connect those two, you can’t really be saying, “oh, so I invested like two years and I actually collected the dividend. So that was a good investment”. The result might have been better than a global meltdown. But it’s not necessarily a good investment if you consider the risk that you incurred at the same time. So that’s just one thing I would like to add into that. And that’s actually regardless of whether or not the S&P 500 would rise 5% tomorrow. It’s still a risk reward kind of thing in investing. 

Just to piggyback on your question, Calin, and to ask you a new question, actually. You talked about the US and I know that you’re Canadian, but I would also assume that there must be some sort of a home bias. At least that’s something we know from the financial literature that we would like to invest in our home country. Have you considered looking at equities outside of North America?

Calin Yablonski  27:53  

No, I focus primarily on Canada and US. It’s challenging though right now because the Canadian dollar has taken such a huge hit relative to the American dollar. So I was looking at other opportunities for things like Canadian companies that are traded on the TSX (Toronto Stock Exchange) but do the majority of their business in the United States. So that he would get a premium on all of the earnings that they had. But really, right now, majority of my portfolio is is in cash, just because of what I’ve been seeing in the market.

Tobias Carlisle  28:25  

I’m more bearish than any of you guys. That’s what I’m going to come out and say. Just to preface what I’m going to say. I would say that I was very, very bearish in 2012 too. And I’ve sort of been very bearish through that whole period. The thing that you’re doing with dollar cost averaging as you’re saying, I don’t know what the markets going to do. I don’t know if it’s going to be back to where it was in 2000 on a Shiller PE basis, which was 44 times. It’s been a while since I’ve done the calculation, but I think that gets us to like 3000, which is insanity. But you know, there are other markets around the world. Japan got to 100 times. China got to 100 times. There’s a risk that it goes up a lot too. And this is just one of the things that you have to contend with as an investor. It’s not an attractive opportunity set. There’s nothing to really good to stick your money into. Cash doesn’t work. Property doesn’t really work because there’s no yield in real estate. There’s no yield in the market, either. At 2% that’s historically pretty low. That’s not too bad over the last five years, but companies are paying up more of their earnings to sustain that level of dividends. 

The thing about the dollar cost averaging is that, the idea of it is that when the market is high, you’re still following your plan and you’re putting the money in and you’re saving a little bit into the market. When the market is low, the same sort of dollar amount buys you more of the market. So, over a lifetime of doing it will put you ahead of somebody who’s not in the market. So having said that, I think I’d probably call down the market gods to send the crashing down just after everybody gets fully invested. Not proposing full investment. I’m just saying that if you’ve got a plan, you should stick to it. 

So, I can tell you all the reasons why this market’s really expensive and why this bull market’s really long in the tooth. And I can see that earnings are falling over. And I think that down is probably more likely. I’m not saying that it’s not. I just think that I would have said something like this in 2012, and I’ve been wrong for a really long period of time.

Preston Pysh  30:20  

Yeah. But Toby, that’s back in 2012, before they announced the QE3 (quantitative easing 3), and the epic levels that that was gonna go to. So whenever that came out, and you saw that they were going to buy it at an even more unprecedented manner with quantitative easing 3, I’m sure you probably saw that as, “hey, that this thing’s going to go for another pop or it’s even go higher”. Is that how you saw it back then? I’m just curious.

Tobias Carlisle  30:44  

No, I’m sort of a subscriber to that. I don’t actually think it has much direct impact. I think that those fit interventions sort of, to the extent that they do anything, they’re sort of more psychological. And I think that directly pump up the market. That said, who would have thought that would have done QE3. I mean, what’s to stop them doing QE7, QE8, QE9? Rocky 6, Rocky Balboa. I think it could keep going on and on.

Preston Pysh  31:11  

I think you got a great point. No one’s signaling that in the US at least right now. But, you know, I had a chart that I posted on Twitter where as soon as the US Fed winded down their QE3 back in November 2014, you saw an immediate takeover from the ECB (European Central Bank) over in Europe where they basically just picked up right where the US fed left off. So, this is definitely sequenced. The central banks are sequencing this. I’ve got charts that I’ve posted on Facebook and other places that totally show that as a collective balance sheet growth from the Fed.

Tobias Carlisle  31:52  

It can get data *inaudible*, and it already is. Einhorn has this great quote where he’s talking about an overvalued company saying, “company trading at two times its intrinsic value is silly. The company trading at four times intrinsic value is not twice as silly”. Still just silly. I kind of think about that sometimes, like, there’s some unprecedented stuff going on. What’s to stop more unprecedented stuff occurring?

Stig Brodersen  32:16  

Yeah, I think it’s interesting, because we had Raoul Pal on the podcast. I think it was episode 94. And he said something similar. Because we’ve been talking about QE insight before, and I guess, especially if you live in America, it’s easy to say, “well, you know, we have QE, and maybe we have a soaring stock market”. I mean, they’re probably correlated one way or the other. But then you have someone like Hussman or someone like Raoul Pal, saying, “well, we’ve actually seen abroad that that’s not necessarily what’s going to happen and we can have like tons of other factors that are really the reason why you see that kind of stock market”.

Preston Pysh  32:49  

So I’ve gone to Doug Short’s website, dshort.com as a quick way to get there if people want to go. And he puts up this chart from time to time that shows the timing of the QE and the growth in the stock market, and basically shows how poor related, and I know that that’s a horrible word to use because you can’t actually prove whether it is or isn’t. But the way that the charts look, it looks like it’s correlated. And so for me, I saw this chart. I was like, oh my god, this is like a 1.0 correlation when you look at these two events or the QE with the stock market. And so then Stig said, we asked Raoul and he flat out. He was like, “no, I don’t think that there’s a correlation there”. And I was shocked when he said that. And now you’re saying that you don’t think that there’s a correlation there. 

I’m really curious if there’s somebody out there that has a hardcore statistics background that would like to try to take on this problem. I’m thinking through like the gymnastics of how it happened. So the Fed swapping, they’re basically buying bonds. They’re replacing cash into the economy taking bonds that have a coupon to them out of the market. And then that cash has to go somewhere. It has to be reinvested into something. And so where does it go? I mean, in my opinion, it goes to the highest yielding asset class at that point in time as long as you’re not in some type of contraction situation, which was the market. So, maybe I’m oversimplifying that. Maybe I’m not fully understanding it. I would love for somebody to send me something, we will put it into the show notes of this episode, and try to provide as much information to the audience on this. And I also want to put up the chart from Doug Short’s site to show people this idea of how correlated everything looks when you combine the two charts. Man, I’d love for somebody to school me up on why that idea is wrong.

Hari Ramachandra  34:33  

I want to make two points here. Number one, the first question I have is, isn’t it in the best interest of the United States’ government that the interest rates are low because they have so much debt, so that their interest payments is low? In fact, there are statistics which show that if interest rate goes up every percent, the debt payment kind of balloons. So that is number one. Number two, to your question that what would happen if there is more QE announced or if the interest rate remains low for a longer time? My answer to that is, it will erode the confidence on dollar among people, and among investors. And currency like gold might then catch up at that point of time.

Preston Pysh  35:19  

Yeah, you’re exactly right, Hari. Everything that you just said is true. Your comment reminded me of a book that I read that Stig and I never did on the show. And this one was recommended to me by somebody in the audience. I didn’t think it was a real good fit just because it was kind of a difficult subject to really tackle. But the name of the book is, “This Time is Different”. And I guess billionaire Bill Gross, who’s like the ultimate bond investor ever. I’d like to have that narration I gave for his description. But he, I guess swears by this book, “This Time is Different”. And what this book does is it goes back into like the last 500 years of financial history. They show that what we’re experiencing with these large debt cycles, these large credit cycles, these 75 to 100-year deleveragings are very, very common, and that they’ve happened countless times throughout history all around the world. And what this book does is it profiles the steps that these countries go through and how all this kind of stuff plays out. 

Now, one of the things that it talks about in the book is how we’ve never seen one of these large credit cycles take place on such a global scale like we’re seeing right now. And that really has to do with the fact that the dollar is polarizing all these global markets. So that’s a book that I want to throw out to the audience to definitely get your hands on if you want to dig into this idea more and maybe understand some of the stuff that Hari was talking about and maybe how all this fits together. The name of the book is “This Time is Different”, highly endorsed by billionaire Bill Gross.

Stig Brodersen  36:55  

I think it’s fun just for anyone out there if you go back to this to all our episodes, sometimes you hear us saying, “yeah, so that’s the causality between quantitative easing and the stock market, or that’s how gold and dollar work together”, whatever it is, and we’ve just been speaking with so many people that have different opinion. We have studied so many other subjects ourselves that sometimes we’re just uncertain like, we just simply don’t know. And for what it’s worth, I hope this comes out as something that’s positive, something that you would appreciate, but really something that really should signal to everyone that you need to be able to do your own analysis. It’s really not enough to listen to The Investor’s Podcast or to Bloomberg. It’s really a question about “what is your analysis saying?” and for what it’s worth, I really hope that that’s the takeaway from all the discussions we have in the Mastermind Group.

Preston Pysh  37:50  

Alright guys, that’s all we got for you this week with our Mastermind discussion for the third quarter. I just want to give a quick highlight to all of our members, and just thank them for taking precious time out of their schedule to talk with us every quarter. If people are wanting to know more about some of the members of our Mastermind. 

So Calin Yablonski, he’s a master at search engine optimization, marketing, you name it, anything in that realm. He has a company called Inbound Interactive Level. Link in our show notes to that. 

Also Toby Carlisle has a website called the Acquirer’s Multiple, which is all about his deep value philosophy. He’s also written a book called “Deep Value”, which is one of my personal favorites. And I’m not saying that because he’s on the call. I truly mean it. That’s probably one of my top investing books I’ve ever read. And I see Stig on the call here nodding his head because he completely agrees with me. So go to the acquirersmultiple.com or you can go to our show notes and click on the link there. 

And then Hari Ramachandra. He is out of Silicon Valley, he’s an executive at LinkedIn. And he has a website called bitsbusiness where he’s writing all about different business ideas and things that are happening out in the Valley. So I highly encourage you to visit his website as well. 

Guys, thank you so much for talking with us. I think this was a really fun conversation. We hit a lot of really amazing topics.

Stig Brodersen  39:01  

All there’s left to say is that we’ll be back in three months’ time with a new Mastermind discussion. And we’ll be back next week with a new episode.

Outro  41:03  

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