New Constructs' Friday Webinar: Intelligent Capital Allocation - 14 July 2023

Welcome to our Friday webinar. Thank you for joining us. Today is the 14th of July. We've got a great group for you today. Not only David Trainer, but also our special guest, David Hendler from Viola Advisor. We're very excited to welcome him. David will be doing that more formally later on in the program. Also with us as usual is Kyle Guskey. Here's our disclosures and disclaimers and our agenda for today. We will be taking a break starting in a couple of weeks, July 28th through probably the end of August. As usual, our agenda is driven by your topics and questions, so please do not hesitate to use the Q&A feature. If you use the Q&A feature in Zoom, that's the easiest way for us to make sure that we're getting to your questions and track that we're really getting to all of them, which is very important to us. Society is our online community. If you have any questions about that, you can contact me at support@newconstructs.com. That's where you can easily get replays and the slides. You can see the replays themselves out on YouTube as well. A ton of research came out this week. The Best and Worst by Sector and Style is Every sector, every style. Featured stock for most attractive, most dangerous also came out this week along with the focus list performance metrics for both short and long portfolios. Long idea, not another pipe dream. Interesting topic and company to look into potentially. A couple of position closes for long as well, an electronics manufacturer and a tool manufacturer took gains. This week in the model portfolio. And the exec comp aligned with ROIC update for July also came out. Please go check that out. If you have any questions, please don't hesitate to ask those questions on Society. We'd love to interact with you. We can't get to the research, every bit of it on our calls, but we are interested in the areas that you have the most questions about. I'm going to go ahead and hand it over to David to talk about interesting headlines and he'll segue us out onto society and into David Hendler.

Great. Thanks, Tamara. As usual, I want to give an update on the Bloomberg ETF. We're making some great progress there. We've had a couple of marketing meetings today, as well as a meeting with one of the 5 issuers, ETF issuers in the world. So I'm excited about that. And then in terms of the model, Tamara mentioned this briefly, but we did have published an update, 4th amendment update to our models, a project we've been working on for about a year now about how we deal with the fact that footnotes disclosures are inconsistent. So there's one thing to go through and deal with finding all the footnotes, understanding what to do with footnotes, making sure the model properly reflects The economic consequence of footnotes. Most people don't know though, because they don't look at footnotes, that you can't trust that that footnote information is going to be there all the time. And you can't assume that that financial instrument that the footnote was for before disappeared because the company chose not to disclose it. Operating leases is the most obvious example. You can't assume that all that capital that was tied up and funded by operating leases last quarter or last year stopped existing in the current quarter because they didn't disclose it. Because if you did, your free cash flow model, your return on invested capital model would be all messed up. And then, oh, by the way, next quarter they do disclose it. So we see this all the time with respect to a lot of different accounting disclosures, including pensions. And so we have to find sophisticated ways to deal with the fact that the data's missing. We recently refined one of those techniques around pension estimates. It's going to have an impact on 40 or 50 models and ratings. It's worth taking a minute to explain what that is because it's a really sophisticated update and element of what it is we do. We're also going to be offering a starter pack subscription coming in the next few weeks for folks who aren't quite ready to make the jump to a professional subscription. That's rolling out. I would also encourage you to take a look at the new page on our website to look at more ways to get involved with New Constructs. We are doing these webinars and the Society for Intelligent Investors to be more engaging. And one of the ways we can do that is by making it easier to get to know us. And we're trying to be better and better at that. to this new section on the homepage, learn more, provides a couple of opportunities. Number one, register for the Ask Me Anything webinars like we're doing today. Buy reports à la carte. Get to the new favorite, get a free subscription. If you can replicate one of our models for core earnings or invested capital as specifically defined in the definition and the examples, post that on the Society of Intelligent Investors And we'll take a look immediately. We'll give you a free subscription if we can tell you did the work. But it's a great way for you to get a sense of how much work goes into doing this kind of analysis and how much value we add. And last but not least, if you're interested in this new starter pack subscription, give us your email here and we'll make sure you're among the first to know when we do finally publish that or finally make that available. Let's jump over to Circle and what was discussed this week. The pegging estimates were obviously good. Earnings adjustments. We had a question about how important is the number of earnings adjustments, and we addressed that in the context of a very specific company. I think it was Mueller Industries. Domino's, it's been one of our focus list stocks for a long time relative to Cava. It does a really good job with return on invested capital and cash flow. And then our friend, my buddy David Handler's going to be able to speak to this too. But there's a great article in the Financial Times on the flaws in sell-side research. And as part of understanding the value proposition that New Constructs brings to the table, you need to understand the reality of Wall Street research and that it is not designed to inform investors. And they say that quite directly in this article. We've done many features and write-ups on this. It's well known. It's documented in the data and the research academically. from practitioners as well that can't trust earnings estimates or Wall Street ratings or the research. And we had a couple comments around market cap. What does market cap mean? Why is that important? It's really about liquidity. If you got a $50 billion fund, you can't invest in a $20 million market cap company. It doesn't make sense unless you want to own the whole thing. Your position would be too small to be even worth the time of doing the research when you have that big of a fund. A little bit on home builders and what we see there. We got some stocks in our focus list that are home builders as well. And then another one of my favorite topics is the standard of care and fiduciary duty of care. If your advisor is not holding him or herself to the fiduciary standard, then they don't really have to act in your best interest. They got to do what's best for you right now. And guess what? That just ended. So it's not a really high bar, whereas the fiduciary duty of care means they've got to really make sure that they only do what a prudent person would do. And to be candid, any advisor that knows about new constructs knows that it is a more reliable source of fundamental research. It's hard to make a straight-faced argument to clients that you're not using it. What are you going to say? I'm knowingly using information and fundamental analysis that ignores critical data in the footnotes. That's a tough sell. This potential change in the SEC, we think, is very healthy for markets and more and more investors need to understand exactly what responsibilities advisors have and what modus operandi they're operating under. And then one last thing we'll jump on here. Well, 2. Yeah, I get both of these. Both these are too good. AI is a lot of work. Great article from The Verge on what's required to make AI work. And it's a really great message around how difficult it is to get machine learning to actually be helpful. Huge amount of data has to be collected and it has to be collected meticulously. And this article talks about how they've got folks in Africa, Doing a bunch of work to make sure, is this a bike or a bicycle? Is this a bike or a fish or, or a bicycle or a motorcycle? And doing that over and over thousands and thousands of times a day and hard times to get people around to do that. But that's what's required for AI to work. And we know that's true because that's how our AI works, except that we did it in footnotes and financial statements. A lot more difficult than a bicycle versus a motorcycle. But we've got hundreds of thousands of iterations, millions of iterations of those nuanced distinctions being made for clients. It was refreshing for me to see an independent source talk about how much work that is and how important it is. All right. Last one here. Malinvestment. We talked a lot about that last week on my interview with Adam Taggart at Wealth Beyond. What better example than Barry McCarthy, the CEO of Peloton, making over $150 million last year? Peloton, in case you don't know, zombie stock, burning cash like crazy. Never made a single dollar profit, but they found a way to pay their CEO $150 million. If that is not an example of misallocation of capital, as an example for any of you that had even thought about owning Peloton, why you don't want to trust what Wall Street says, I don't know what is. Peloton's taking shareholder money, giving it to this one guy. Talk about taking the pockets, money out of the pockets of the many into the pockets of a few or one. One of the most egregious examples of corporate misgovernance, malinvestment, a compensation committee breaking down. I mean, this should, people should go to jail over this as far as I'm concerned. And maybe they will someday. So speaking of jail, my good friend David Hendler was on Wall Street for a long time, never came close to going to jail because he did things the right way. Was around a lot of people who did go to jail. Maybe not a lot of people who did, but we were at Credit Suisse around the tech bubble. There was some shady stuff going on. David was an early mentor for me when I was in the business. I was a young pup and he gave me a lot of good advice, not just about research, but professionally. And he was on the Mike Mayo team, one of the best equity research teams in the world ever. And David has always brought a very deliberate, rigorous, intelligent approach to securities analysis. And I wanted him to come on and talk about how we worked together over the years, give him his background about almost always being on the buy side. Then he went to the sell side and went back, focused a lot on fixed income and debt. So for our fixed income and debt clients, David knows what you're saying, but he also understands equity research. So I'm really excited to be able to connect with David again and have him here with us and share a little bit with you about what it's like to be on Wall Street and what it means to do good research and be a successful investor.

Thanks for the interesting intro, Dave. I was on the buy side for 4 years, and really that's where I got a lot of my conservative ways of investing and doing the analysis. Doing it on my own. And then I went to the sell side for probably 15 years at various firms and really created research reports that helped to sell securities, mostly debt and different ranks of debt from senior debt to junior debt, subordinated debt to perpetual preferreds. So I was riding that market for 15 years. Then I did a stint, 2 or 3 years in equity where I met Dave Trainer. Really, he was on the economic value-added team and really got me to understand that as he was one of the big proponents and distributors of that information. And then I guess when I thought I knew something enough to Go out to a startup. I went to Credit Sights. I was an early-stage employee. I was there for about 15 years and went from 3 analysts to 80 analysts worldwide, mostly in US, Europe, London, and Singapore. And 2 years ago it was sold to Fitch. Its motto was independent, credit research, not influenced by the sell side's desire to sell bonds and stocks first and do the research due diligence second or third. It did really well. It still operates as an independent subsidiary of Fitch doing its relative value analysis on debt securities, high yield, high-grade emerging markets. So I had a nice little lineage from all those experiences. And then I decided I want to do everything on my own. So I went and started Viola Risk Advisors. Viola's the major street that runs by my street, so I use that and it's been a good ride. I started out in debt and I went to equities. When I went to Credit Suisse, I combined debt and equities for capital structure research. And then when I started Viola, Being focused on the banking industry, which is highly regulated, so they say, integrating regulatory risks and counterparty credit risk, which is big for trading banks. Who's going to trade with who, how much, and then how long? So, you know, those 4 major factors gives you the holistic risk aspects of a bank. One influences the others. Sometimes one leads the others, but you really got to understand it all. There's not a lot of people who do. I would say I'm one of the only ones because I spent time either in debt equity or I interacted a great deal during the great financial crisis with all the major regulators in the US and even Europe and Asia. I also interacted with a tremendous amount of capital market credit analysts, basically control the spigots of trading exposure in the US and the world. So I had all these great backgrounds and I've been selling into that network of investors, risk managers, stakeholders, stakeholders, stockholders for the last 10 or more years. So that's the background. So you want to fire up the questions, Dave?

It's important to take a second to make sure people understand what you mean by capital stack. So capital stack means looking at all the capital in the business, not just the equity or the debt, but both, including preferred convertibles and other potential even derivatives. And what that holistic approach brings to the table is a much more intelligent understanding of the business, especially with banks vis-à-vis their business competitive landscape, but also the regulatory competitive landscape, because the regulators are making things pretty tough for banks. That's a whole nother world that they've got to navigate. And that will meaningfully affect their capital structure, which ultimately affects the equity guys because the more debt and other capital they pile on top of the equity guys or commitments, the less there is there for the equity guys. What David did with Viola was really cool. There's, how many other firms out there do full-stack capital structure analysis?

CreditSights does debt-focused with a little Eye on equity, but nobody really does it. There's been decades of Wall Street trying to do it in-house, but there's all these rivalries between debt people, units, and equity types. Then there's the investment bank, so they never get it done. They don't really want to get it done. It's lip service to the buy-side equity to try to do this. Some buy-siders try to do it, but nobody Continuously does it. We do it in the banks for the last 10 years. And you guys, New Constructs, really, your data's seamless and continuously generated, makes it possible. Because I have a few people helping me, but to have armies of analysts is too expensive. Even Wall Street has cut back on most of its debt research. And even high-yield research. So it's not done strategically, and for a lot of entities, it doesn't make dollars and cents, so it's not done. So we do it and we have expertise.

I want to go a little bit deeper on your comment around the internal politics or conflicts within a bank as to why they wouldn't do full capital stack research. Are you saying that there are priorities Within an investment bank that conflict with doing complete research?

Yeah, well, there's all profit centers and bonus pools, and if I'm going to do all this work, am I going to get paid for it? From the unit heads level to the mid-executives to the analysts, there's no unified vision and incentives to make it happen. A lot of times in an investment bank, trading bank, everybody's operating independently. Once in a while, the big shots, CEOs and board types says, oh, we gotta do this. They knock some heads together and then those heads wait for the, the top guys to forget what they said. They produce their own money and their own bonus pool. And if they don't get paid, then they go to the next firm. That's basically how it works.

That's right. They're all chasing the dollars for them right now, short-term, and if it doesn't make them money, then they move on. I've mentioned this in the past, but I feel that's more a product of the business post the tech bubble. I feel like prior to the tech bubble, David, would you say that there was a little bit more sense of stewardship and leadership from people on Wall Street in terms of their view of the capital markets as opposed to just looking at it as a place to, for lack of a better word, pillage and make as much money as they could?

I'm scratching my head here trying to think if that ever happened. I mean, I guess the historical Morgan Stanleys and Goldmans from the 1990s and '80s and JP Morgans, they were unified team-oriented, but even they have broken down. Maybe JP Morgan A lot less so, but Goldman is not what it used to be. It's a winner-take-all philosophy. And Morgan Stanley maybe is a little bit more cooperative, but it's a free agent game. Everybody's operating for their own motives and that's how you get compensated. It's a superstar system still. You can be an A-player. That's what they want. A's and A pluses, B's if you're progressing, C's get outta here. So that's how it is.

That's how it is today. But you would agree in the pre-tech bubble times that some of these bigger and more established banks, at least they were a little more conscientious of their responsibility to be stewards of the capital markets.

Yeah, they were better gatekeepers. They had cultures that were developed from training programs and Time and grade and learning the system. But a lot of that's gone out the window, which is an opportunity for new constructs to do the work that they should be doing.

That does segue directly into what I've said before, is that there's just no incentive for anybody to do any real research. I mean, if their goal is to make money for themselves, they're not out there publishing information that's going to help other people make better trades. Unless they get paid for that, which is only happening when they give that kind of information to a big buy-side client who they hope will in turn reward them. We had a nice question come in here, David, that I'd like to take while, as they come in. The question is, is there a segment of bank capital structures that typically has the best risk-reward?

Well, it varies when things are calm and The industry looks stable. It's in a stable run rate. Your junior securities have the best spreads versus the potential downgrade risk. But as that changes in some dynamic, you gotta go up capital structure, trade up in quality to senior notes, sometimes bank loans. You know, bank loans aren't as big a deal in In bank land because they're really there as backstops to certain programs, commercial paper, asset-backed commercial paper, things like that. So you're varying between sub-debt, perpetual debt of some sort, perpetual preferreds to senior debt, senior unsecured. Sometimes they're senior secured, but The big swings are in the longer-term maturities, so 10 years and out, and the lower you are in the capital structure. For instance, in the latest contagion with those regional banks, First Republic, Silicon Valley, and Signature, as the regulators got involved, closed 2 of them down, auctioned off the First Republic, they wiped out not only equity, but perpetual preferred stocks got wiped out because under a regulatory regime, that's considered equity. So if you were playing in that, as it was in 2021, you were getting 4.5% to 5.5% yields out of perpetual security coupons, and the 10-year Treasury was at 80 basis A lot of institutional investors were falling all over each other to try to get that new issue deal. If, and if they didn't trade out before what happened, the more junior you get, the more illiquid it is. Although dealers on Wall Street have trading desks that specialize in that, they got wiped out. They went from par to zero in 2 years. So you have to figure out what are the tendencies toward that. I'm not saying it's easy, but new construct spotted things that could have helped you. Now, was it just because of interest rates going up? Maybe. Is it also because, like you said, with Peloton, management was selfish and they were doing selfish short-term things that lined their pockets? Yes. Were the regulators asleep at the switch? Yes. Were the rating agencies also in a coma? Yes. Were the equity analysts typical on Wall Street cheerleading it all on because of growth? Yes. So where was the sane person in this process? I would say new construct had the data. Who used the data is another thing. to understand and execute the trade. But at least New Constructs provides the data. I know you have recommendations on the equity side, but that's what New Constructs does for me. It leverages my expertise to areas that I don't have enough people to break down all the balance sheet stuff, footnote stuff, and standardize it and do it every quarter. And compare it on an equal basis across the industry segment globally, non-regulated entities. So that's the beauty of new constructs is that it amplifies your capabilities.

Quick summary of what you said is the more junior the debt, the better the upside until things get a little bit nutty where there's economic turbulence. And then you're going to wish you were higher up the capital stack. That's the classic debt versus equity decision. I mean, debt's a lot safer. Equity's got more upside, but that makes a lot of sense, David. Thanks for that. I remember there was a few years ago you mentioned to me some new security that came out that was this really good deal, something on preferreds. Remember what I'm talking about?

That was the perpetual preferred, which has had a lot of— it looked really good in that unusually low interest rate environment. And there's different structures to it. There's fixed rate for life, but callable in 5 years. And then there's fixed to floating, more of an institutional product, but it's highly interest rate sensitive. So when Chairman Powell of the Fed is on a yeehaw to raise rates 500 or more basis points in one year. That's going to crush the market. It's down 40% since when all those securities were issued.

It was one of those things where when things were great, hey, these things look awesome. And then of course they're based on the assumption that things are going to stay great.

And when things are no longer great, Are they going to stay in a zone where you can do things? I mean, what we're getting into is, is the Fed's policy so good for so many? And by the way, my quick take on it, okay, they want to kill inflation, but they're also killing a lot of banks. I'm not saying the banks blew up, weren't out of their mind anyhow, but Doing 500 basis points in one year. Nobody stress tests for that. It's too extreme. I don't think the Fed realized that, even though this morning the big banks are doing well in their earnings, mostly on the consumer side. The regionals are having a hard time adjusting and it's because it's unprecedented, such a rapid rise. So yes, the securities look good, but The last year or 6 months, they've been crushed. But if the Fed eases, they snap back. The Fed has to. It's all about duration and they have 20-year duration when a senior note has 2-year duration. So the longer the duration, the worse it is when rates go up.

The whole Fed and the direction of inflation and interest rates is such a hot topic and What you're bringing up is an interesting nuance that most people aren't going to catch, and that is that we all know inflation was a problem and maybe the Fed was behind the curve and they needed to catch up, but there's something to be said about doing it at a rate that would allow your constituents, particularly banks, to adjust their portfolios accordingly. And what it sounded like I heard you say is that Powell really stepped in it by Number one, being a little bit late to raising rates, but raising it at such an unprecedented fast rate that you caught a lot of your banks off guard and that was unnecessary destruction by the Fed.

Yeah. I mean, they want to really slow employment or make people out of work to reduce inflation. I mean, it's an oxymoron and now in the political season, I guess he's going to have to stall out at this level, maybe one more 25 basis points. It's a lot of companies. It takes time to readjust to the environment with banks and interest rates. To summarize a lot of different strategies, it takes you a year and a half to 2 and a half years to really reposition the battleships for higher rates. You can't turn on a dime. Because the Fed wants to accomplish one goal. They do regulate the banks and they, they should understand that, but they didn't really focus on that.

You don't think he signaled for long enough that, hey, this was coming? Because it felt like there was a lot of worrying and saber rattling for a long time and then a lot of complaining about it.

There's also the struggle between banks who run for shareholders. They want to see EPS growth. And in a low-rate environment, you probably don't have a choice about buying mortgage-backed securities at a 3% coupon area to 2%. So you can't just be in short-dated safe securities and meet your earnings per share targets. There's that push and pull between running a publicly traded company We have to stand out and adapting to the interest rate environment to be so conservative, to be so secure, to be bulletproof. You would've had to been 1-year treasuries, your whole balance sheet. It's not really—

That's going to kill you. That's going to kill your stock.

You're not lending money and you're not helping the economy, and the Fed wants the economy to be strong. So there's all these oxymorons. But if you do it gradually, everyone gets time to readjust. Basically 20 to 30% of a bank's balance sheet matures every year on the asset side. So take that cash, put it in a floating rate security that will adjust upward, short-dated T-bills and things like that. So they didn't give any time to readjust it, but Some of the big banks, they have more levers to pull, especially on the consumer side. And so that's been helping them, although consumer losses are going up a lot now. Right now they're covering it. Well, yeah, we're getting into the weeds of banks.

Let's bring it back a little bit. Most of our folks are equity investors, but I believe they're all investors. David, what advice would you have for folks with respect to what it means to be or how to be a successful investor?

Well, I believe, and I think it's across industries, that you have to understand, not be expert or go to your experts in your companies, each market and what it's telling you that might influence your investing area. So for a period of time, equity was liking the big banks before the credit crisis in the mid-2000s, late 2000s. But the CDS market, the credit default swap market, was saying something else. So there was a lot of belief that, well, the debt and credit default swap market, which is even a more liquid derivative index of what's going on in a company or an industry that was leading the risk deteriorating. Not as many equity people were following that, if any. And then it's the other way around. Even equity sometimes, usually more on the upside, is forward-looking than debt. So that's where you could help each other out. New constructs. If you look at the last 3 banks that blew up, you can see the economic profit was deteriorating from 2020 to the end of 2022. So you had a negative trajectory from a really strong base. And then it really got ugly, got the ugliest in March. But even in the first and second quarter, other statistics that I contrast with yours are combined with showing high systemic risk for these types of entities. So you gotta look at different Areas that can help you make a better decision, not just the one you traditionally look at.

I know you predicted the demise of Credit Suisse long ago. Was there another bank that you also were really pressing on having some troubles?

Well, there was a period with Deutsche Bank from 2016, '17, we were banging the table that it had a lot of risks. And it really deteriorated the debt and equity markets because of how they dealt with different types of derivatives. Wells Fargo in 2015, '16, we're noticing from a lot of your data, they were viewed as the strongest, most profitable bank. And on an economic profit basis, it was really not that much. It was deteriorating. It wasn't anywhere near as strong as they claim. A lot of times you're a divining rod, you're a company in data to do further analysis. Look at the footnotes more, look at the strategies, talk to management if you want, model things a little bit differently, and then you'll get ahead of the curve. You want to be optimally ahead, I would say 12 to 18 months so you can sell at a better price and let everyone else In the investing world, hit the wall. It's not always that easy, but that's the goal.

When you say dividing rod, what I think you're saying, and this is one of the bigger messages that's important for anybody who wants to be an investor, is we all have a limited amount of time. We can't research everything. So we need to find things that are going to be good leading indicators as to where we should spend our time. I think what David is referring to when he says Divining Rod, he's talking about that return on invested capital versus cost of capital spread, that economic cushion that other fixed income clients of ours have talked about as being a very strong indicator as to the eventual credit quality. So it doesn't always help for our models to tell you, oh my gosh, the credit quality of this business is terrible. You want to be able to look at the trend. And understand where it's going to be, not where it is. That's part of the reason why I'm really proud that we have fixed income investors and we got really rigorous, experienced folks like David and others who understand fundamentals and can say, listen, this is a tool to help me understand what's going to happen, not just where things are. That's an important point to make. And it's important to also point out that this is not just one person's idea, that a lot of our clients that are in the fixed income side of things, they look at that return on capital versus cost of capital spread. Which is something we also consider to be the most important for an equity investor. We're just about out of time. Is there any other parting shots or comments you want to make before we sign off on this Friday?

You got to constantly look at this stuff, the data from new constructs, take it for what it is, and also compare and contrast it with other databases that you have. And when all is said and done, the individual analyst has make the call. So a lot of times we agree with New Constructs, sometimes we don't, but at least with New Constructs, we're covering all the bases. We know that, and that's what's really good.

Thank you. Yeah, and that's the idea. We're not here to pretend that we've got all the answers. We're not here to tell people what to do, give advice. We're not advisors. We are publishers. We are researchers. We're here to try to make your job easier. And help you make more informed decisions, but we're not at the steering wheel. Thanks for that, David. That was awesome.

Appreciate all the cooperation, teamwork over the years.

Absolutely. My pleasure. Kyle, you want to end it up with the stock picks?

We'll end it with one danger zone pick and one long idea. On the danger zone side, wanted to feature Trupanion. With the way the market's moved, there hasn't been a ton of danger zone picks that have Outperformed in the past week or so, but Trupanion down 2% over the past month, S&P up 3%. They're actually down 42% year to date and 24%. So we named it a zombie stock in May of this year. Moving in the wrong direction if you were long, the right direction if you went short, but even a good direction if you avoided it. This is a zombie stock and we think it could go to zero based on cash flows. The way the business is trending. And so we've seen that play out. You can see there the year-to-date chart, it's just been steadily ticking lower. The next one, we can look on the other side. This one David mentioned in the Society review about home builders, D.R.

Horton.

It's one of our long ideas, up 10% in the past 5 days, 39% year-to-date, and up 169% since we featured it back in April 2020. Strong performer in the middle market there, really attractive segment of the homebuilding market through all cycles. And so we're seeing the company has performed well, stock price has performed well, and it still looks good. Those are the 2 for this week.

Excellent. Well, we do hope that you'll join us out on the Society of Intelligent Investors. And one more thank you to David Hendler for taking the time to join us today. We really appreciate it.

Thank you.

Thanks, David. Have a great weekend.