Do Go On - Earnings Season: Episode 15 - Half Tangents (Part 2 of 2)

Episode Date: November 21, 2019

So that long episode from last week? Here's part 2. Show notes to follow. ★ Support this podcast ★

Hi guys, Randy here. So last week we gave you a conversation that, as I told you, happened organically and as a result of JPS. Thank you very much JPS for inspiring something that we didn't expect to happen. So we were back and forth about whether or not we would give you part two this week or we'd wait a while because we have a couple of episodes that we want to share with you, a couple of voices that we want to share with you, a couple of ideas we want to share with you. But we decided against that based on just the initial response of that episode. One, I thought it was too long. And two, I was like, boy, I don't know if they like it. I don't know if the content is good enough. I don't know.

I was worrying about whether or not the content is worth it. You know, if there's value there. And if there's value there to have somebody listen for three hours. Based on the response it's also to the people online who have been making me know quite clearly that hey they just want to hear good content they don't care about the time of course that doesn't mean i'm going to battle you with three hours so we made a decision last week to cut it in two and give you part one so what you're about to hear is part two of that conversation. We decided to make sure that you didn't wait too long to get it. More gems in it. I thought there were a lot of

gems in the last one when I listened to it and listening to this part two, let's know there's even more gems. We're going to more companies, actually pull up a couple of things and speak directly to them. I just think there's more value there, but I didn't want to give you three odds in one go so this is part two of that now if you haven't listened to that before go back and listen to it please this might make more sense to you if you hear how we were coming in so don't let this be the first part that you listen to if you have listened to it already and you remember it clearly then feel free to listen to this one if not you can listen to both of them one after the other if you're on like a nice long trip or a long flight or something hope you guys enjoyed let me know if you don't like it let me know if you do like it you can tag us i am at rt you're on twitter you know my co-host danai is at h danai

i should say at h and i can't do danai's voice um let me know let me know if you like it and you can also follow us on twitter at at earnings underscore season i'll say that again at earnings underscore season hope you enjoy this episode let me know if you do or if you don't i'm always willing to hear and yeah enjoy pe if you listen to any other analyst listen to Warren Buffett you hear them talk about

the PE of this company because it really frames the profitability of this company relative to its share price if it's a good deal so PE is applicable so you get some fact for saying it's only applicable it's not applicable outside of industry yeah when it is designed when it's designed to normalize

nature to normalize put everything on the same level so you can say all right if i was to buy that company then my then what i'm paying for the profits of that company is more or less than this company. And that's really it. If you have a dividend-paying company and you have a PE of 1, two dividend-paying companies, they pay the same ratio of dividend relative to their profit, 25%.

But you buy one at a PE of 1% and the next one at a PE of 20%. And you're looking for the dividends, which one you're buying. Yeah, yeah, yeah. It's clear. To us, it's clear. But maybe not, right?

Yeah. If, what I like to put for PE, but specifically I don't hear a lot of people talk about this. I think, I don't think I came up with it, but I thought of it myself. I thought of it in a vacuum. I didn't hear the thought anywhere else um but that's me that's max from a look at a formula our equation then i started thinking about how applicable it is beyond the normal application because

pe is we was trading 12 month pe so the pe is the profit over the last 12 months of earnings that we've seen. Right? So, what we're looking at is the price relative to the profit or the profit relative to the price. Current price relative to the last 12 months. 12 months of profit. Yeah. Per share. Per share.

Yeah. If you were to take a price of 20, right? And earnings per share is 40, right? No. Earnings per share is 5. Then you get a P.E. of price over earnings. A P.E. is 4, right? If you were to buy that company outright, like you buy the whole company,

say Rich and I buy the whole company. If the company were to maintain that same profit every single year, it will take four years for you to get back your initial investment. Okay. So it takes four periods, which is the four, 12 months.

Four. So what, four years to get back initial investment. So that's the amount of time the company pay. So any PE is the amount of time company takes to pay you back. Exactly. So why PE is good. So yeah, look at it like that, right? Continue, continue.

My price is 20 when I buy it at 20. If I have a good outlook on the company and i buy it at a price of 20 and a pe of four my generally good outlook is that my good outlook is that it's going to is that the profits are increasing increasing so that if the profits are increasing then the pe at the price i bought it is falling so it's taking less time than the four years i put it that i initially priced in to pay me back my initial investment exactly because it is rendering a company down from what its entire operations are and and focusing on how does that company repay exactly shareholders which is profit that's how shareholders are repaid

by profit because after i'm paid every expense i'm spending tax money pay the workers how much money left in the company for the owners of the company is

profit exactly and you're not buying a company because if if you're buying a company and you feel feel good about the company and not feel good in terms of

those four people those four taxpayers and what's those for jamaica that's cool that's cool but if you're buying a company for profit about the company feel good in terms of what it does for people what it does for taxpayers what it does for Jamaica that's cool that's cool but if you're buying a profit-for-profit

for profit or to make money on this then PE informs a lot of that and remember why which is why

Buffett speaks about PE must more than once he said PE this versus the PE that must and

why I, Buffett actually often mentions that he, he has a lot of money at his disposal. Really? Yeah. In Tidong and in Berkshire,

he controls a lot of money. Yes. Right? He's in the business of buying companies. Correct. Which is why PE is so great to him. Because he, he starts out with his money and every decision that he makes it hits all kind of value but the thing that he dropped back to is

how much money is this going to turn back to me as compared to the money that i started and a nice a nice thing he always says, if I just said, he would like to buy any company investing, outright. Oh yeah, 100%. Yeah, of course. So, if I had the money to do it, I'm buying it outright. Yeah.

I don't have the money to buy a piece, sure. But Berkshire does it over and over. They buy whole companies and they do invest pieces in companies that they would really like and would like to buy outright. Correct. So if you look at that,

then that's a simple PE right there. Because if Buffett said, all right, it's going to take me four years to get my money because the PE of four profits increasing. But I thought, right,

I control the full profit of the company and my profits are increasing. Anyway, exactly. So I'm reducing the time that it takes me to get back my investment. So he sees that value more than a lot of people.

Sure. But PE is very applicable. If I come to you with two companies to buy an outright, one in the financial service industry and one in manufacturing.

PE on fin is 20. PE on manufacturing is 10. Who are you buying? I can't buy PE alone. Sure. Give the outlook that profits will increase by the same amount over the years.

Both of them. There's nothing wrong. will increase by the same amount over the years. So everything else is good for both of those companies. Both of them, yeah. There's nothing wrong. And prospects are the same. So if the decision is rendered down to PE, obviously I'm going to pick the shorter one. Yeah, yeah, yeah. Yeah, obviously.

And so, yes, I love PE. But we don't pick on PE alone. Yeah. So I need to clarify that. Just because you said it, I know people will think it. Well, I realize that a huge part of the problem too is just that, yo, I like to fix the things that I can control.

So I don't mind blaming myself, even if I don't truly think I'm wrong. The question is, can I adjust something to make it better? And so I adjust it. So for that, I can just speak in a specific way or i can just not speak at all about it which most of the times i choose not to speak about at all anymore right but in that in that well i can talk here which is what i'm doing

now but in that initial thing i talk about pe lightly in fact the very first time i spoke about pe i said that um i think i said something like it's a measure of your return against future your expected return your return against expected future profits and at the time i don't know who said it was like what they're like you're not saying the right thing i know they knew what it was but then if you truly understand at your core what pe is you understand that i did say the right thing i just said it in a way that regular people can understand what what to say in the book it's a funny also the book say what we say because you understand what it is so you understand what the book is saying yeah it's funny i don't hear the time thing often but yeah i mentioned i look i read books and don't see it, but sure. But it's PE is not mathematically.

We care so pretty much about real life. So mathematically, PE is not what this is versus that. What this company's PE is versus this industry. That will define the thing by itself the thing by itself is defined as how much of the profits you are buying you know or you are paying for the profits in a company or the relationship between the profits and the share price and the share price at the point you buy and then you can come the comparison comes after you define what p is exactly you can't compare you can't use a comparison as a definition.

Exactly. PE is a starting point. Anybody who come grow up would have heard me say that. Yeah. PE is not the be all and end all, but it's a starting point. And it's a good starting point. And that's just speaking generally.

It's much less than an ending point. Exactly. It ends as, who gave me more profit, PE go ahead and change, PE go ahead PE go down. So that's the end. So,

let me play devil's advocate a little and say what the usual thing is said, which is that you're not supposed to really compare across industries. So you made the example before, a financial company versus a distributor. And why can't you compare them based on PE? And what was the argument

I'm supposed to make against this? The argument is that, yeah, how they make money is different. So, I don't... But it doesn't change the fact that at the end of the day, the bottom line is the bottom line.

True. I think the real thing is like people expect us just to say something all the time. By rote. In some way, yeah, by rote. Because sometimes it should be obvious to you.

PE is this cool but that's not a be all and end all the second step is that you go forth and know how this company makes money something we said earlier in the podcast yeah we said long time that you you need to know how the company actually makes money which is where the difference between um industries is shown right that's where the difference industries shown because ideas that how ncb met money is different from how we see and also how the market reacts to financial companies different from how the market reacts to manufacturing companies which is which is known because like in jamaica for a long time and still in some way um banking financial companies were just seen lower they actually have lower p.e's than that's funny to me then you know that's funny why because the trust

we have in our financial companies to make more money yes to me that if you trust a company to make more money then that's you saying let me buy it on a higher P.E. Because the time to return will be shortened. Because the premium we pay on the price will be shortened over time. Because, oh, I could buy it at P.E. at 18. But, look at my P.E. at 12. Exactly.

Because I expect this. We have a strong expectancy for the financial services industry to get to do better yes but we don't trade it up or we don't trade it that we don't trade it a higher pe je pe is low which low pe is i expect that the profit will be stable or reducing yes that's right that's right because that's the price the earnings just come in and boy knock but i'm not talking about that yeah the piece but and to clear something case i wouldn't say it before and people by no i expect you to should know if you don't know pe's and you lost i mean check the show notes or just google it but it means the the price

earnings ratio exactly price literally the price earnings ratio is literally the current price divided by earnings earnings for the last 12 months earnings per share. Or the last four quarters, if you will. So you can't do it on the one quarter. But you know what's funny? So lower is usually considered to be better in air quotes. And larger is considered to be worse in air quotes. But we're breaking it down now to say that larger is usually saying that I expect more for this company.

Yeah, because the price will spike based on expectations just like junior market companies tend to have such ips because people expect to be growing rapid profit yes and you tax break they can know they know more visible they can get more as i say get more money so they can pressure the the thing they they're competitors in certain ways but what's funny within industry said i don't think people believe in settings they believe it or they believe it wrongly within industries companies in industries are different marita and ncb money very differently yeah so comparing baritone's pe to ncb's pe isolly. That is something That nobody talks about. Yeah

If it's wrong to compare like a NCB To a Wissinko or a NCB to a Fontana Right? Barita represents a small Amount of the business science of NCB Exactly. And They have within That their products are different. NCB Cross sells their product across

The group. In banking they can easily Go across the thing there Um. NCB can easily go across the MCB cap. Barita has an NCB cap. Barita sells things very differently with the unit trusts or the way that the minimum balance, the minimum investment they need to start with Barita versus NCB. The customer bases are different. Very different. I mean, the things that happen within NCB group, there is Cap Market, which is the real money. And Cap Market's feed off of the rest of NCB group. In fact, NCB has now switched

because now a heavy part of the real money is going to be insurance across the region, right? So again, they've switched. So do you stop using BP then? Tangent, going right back. NCB going into insurance heavily. Sajikor, we're going back. Competing more directly heavily Sajikor we're going back competing more directly

Sajikor yeah right and not just locally the war gone the war gone war gone serious yeah but companies within

industry do make money differently um when you're going to tell me lastly and Missingco are directly comparable

well I mean, we think they are, but if you go deeper, you can see that maybe they... Well, no. Why would you say that? Because at the end of the day, they're both heavy distributors.

They're both heavy distributors. Misinko is a manufacturing component and Misinko, the way they buy in, the way they acquire business, distribution lines, where they invest in the company they're distributing for, so they get a share like distribution lines where they invest in the company

they're distributing for so they get a share of profit and look at the margins on Wisinco which compared to well not Lassie to be fair Lassie and Wisinco

yeah they're in well don't link the two because the two aren't truly linked in the they're linked in our minds yeah because they're not the last cut group of companies they're the last affiliated companies

why last D and last M's integration versus we think of integration to me as a clean integration because we can see it in the margins is like last D and last M in one and bigger obviously yeah but but they the way

they do business is quite different yeah that's that's that's very that's a very very very funny thing so yeah so it's there's no i don't want to get too technical on this one but it's kind of a technical point i think maybe people either bored or interested but not that one no man this coming point coming point is can get heavy technical industry averages um pe averages why i don't like to use them it's backward looking you did that because you hate any backward looking yeah and you must because it's the past yeah and you're looking at all right so sos is backward looking it doesn't show any reflection of the seek book sales barita is our heavy pe like way high yeah yeah before the acquisition but barita's pe was being compared to the industry which was crazy low was around

industry pe was around 12. they were at baritope was way right? But when we do averages, we take all five companies in the financial service industry. We take all five of them, take the PEs add them together and divide it by five. So, then wait it. There's no waiting. So, the thing is now

is that if Barita, so if you say Barita PE needs to go closer to the industry. So, sell Barita because the PE needs to go closer to it. I understand if you say barita pe needs to go closer to the industry so sell barita because the pe is go closer to it because i understand if you sell barita for pe high and that's when you decide that you you have a baseline of what a high pe is and low be without comparison but if if your comparison is on average so compare average is 12 right and you say barita should drop it barita should be so down so this pe is around a pe of 12 if barita's pe is at 80 and everything together adds up to and divide by

the way the average is 12 if barita's pe moves down then the industry average changes yeah so if you're trying to match the average if they're bouncing around well so when something move then average changes so how we keep how we trying to if you're trying to match if you do that to it if you're trying to reach a point you know where everything everybody's pe is on the industry average yes then you have to decide what is a reasonable pe separate from comparison for the industry average there we go everybody must be 12 because average is 12 then you say everybody should everybody would have to be at 12 exactly we made the average 12 which would you saying the industry the industry pe should be 12 so the pe of every financial service company should be 12 that's

you saying you're okay with a pe of 12 without comparison i get you which is madness even when you're trying to go around the oh we have an okay level of pe but we don't do we we don't really think we don't really nobody nobody says it but the thing is if you if you don't if if if you're going if you're going to rely on average to tell you what that is then you're saying you have an okay level p so if you go if you're trying to not say it by saying you have an average yeah then in reality you're saying the average is saying okay level of p so if you go if you're trying to not say it by saying of average yeah then in reality they're saying the average is saying okay okay level of p yeah i get it because you're saying that element that you see why you say there's some technicality in there because you're saying that the element that is being measured

and then measured and compared against something the against is also included in it. So in this case, it would be at the time when Barita had the heavy PE, the ATR, you would have been saying, well, the average is blah, blah, blah. Average is 12, so we're on 12.

But you're saying, listen, this number is included in that 12. So if you really want to do it, back it out. And if you're backing it out, you're saying that there's another number that you have in your mind that's okay. So just say what the number is,

which is why I am very honest. Again, I grow up. Your people get in a whole heap of growth and the podcast are free i grow i said to people that the industry even though they don't like to admit it has always said that an okp is about 12 in 12 to 15 anything yeah 12 to 15 12 to 18 yeah no 12 to 18 is an okp that's what i'm always saying and then when junior market got more and more popular when the junior market happened and got more and more popular they started saying but on the junior market you know multiples of 20 20 are there okay no things are really askew and i don't hear nobody talking about it and nobody's saying anything i want to show you something funny

as of today if you're looking at averages the main market jc's main market pe is actually higher than the junior market pe. I don't hear nobody talking about it. I mean, I could be wrong. If I'm wrong, I'm wrong. The main market PE as of today, this is November 11th, Monday, November 11th, we'll record this. The main market PE is

30.82. The junior market PE is currently, I don't remember, we expect junior market to have the higher pe because that's where the aggressive growth is expected from junior market p is actually 28.27 times right it's supposed to say times where you get it or two x whatever so the overall average market pe is 29.57 right now and up to i can go back and find tweets or people are telling me say i read or too high the junior market and the by doing my companies them have multiples up

all 1920 and you don't understand the whole market is overvalued look at it no the entire market currently is 29.57 but that's a good question do you think that does that mean that the market is overvalued currently i think no i don't think so and again remember i don't buy we don't buy the market we buy companies in the market but that's a question that i think is a natural point that should come up because i think people say okay so if you think if you say 12 to 18 is what the industry used to consider normal and the current industry average is 29 way ahead so does that mean that the market is overvalued is is that signs of a bubble that could pop no i don't think so why not because things are still growing in so earnings are still growing well the bubble grow until it stop grow yeah true well earnings are

still going right that's right profits are still going up uh they're not talking about thing there well people that talk about an american market so i work at houses i've interviewed a lot of people that work at houses and they i hear this a lot a lot a lot what's that about the thing there but the u.s market doing um u.s market not using pe and debunked by people actually actually invest in the u.s market who actually have everybody everybody uses pay attention to the u.s market so someday you hear pe cool um but i've never seen a sheet out here i said the other day that compares the earnings the total earnings of the market over time to the total price of the market over time oh so you've never seen a pe chart like a broken down exactly so i don't see a chart that say oh earnings are high while the prices are low

which means hey the prices should be going up to earning you know i've never seen something that shows a movement of earnings against the prices you haven't seen a true average i've never seen that yeah but even though we talk about the u.s market u.s market has that thought i can find that on every listing company and for the whole market they track that every single day i don't get it for myself but i've never seen it from anybody anything there anybody in industry so it's interesting that you talk about what u.s market do but you're not really doing what you're smart i think at one point at some point you can't hear a title you know so i've stopped arguing i just start working with the people and the truth is when you stop paying attention to the negative the positive takes over and it it make a holy person so for me no i just weren't interested in like how many more

people i can help and what else i can do and on the mark and of course the market i'd invest inside i mean you're still looking for picks, still looking for things that you like, still looking for things that can afford us not just the money, but the feeling

because the feeling is more important. Picking it, getting it right and going ahead. Some men even care about the money. Yeah.

Sometimes I do. Yeah. I just want to see it and I say, yo, there's a gap there. I watch my price integers more than I watch the actual money I'm making in the market. Yeah, I just want to see it and I say, yo, there's a gap there. I watch my percentage more than I watch the actual money I'm making. Yeah?

And other day I was thinking that even other day I was making my big spend and you have to remind me that I actually have money for that. Because I was looking at my percentage and I never actually look at why they make so much money. The dollar figure.

Yeah, yeah, yeah, yeah, yeah. I tell you all the time, I say it all the time to people that, yo, if you're investing and you make it, investing is not this race. I'm not wanting people telling people about yo buy something and put it on for 43 years or 20 years or 10 years you make some money bro yeah i'm not saying that's a plan that's a plan that's what you're looking for that's what you're looking for my why i did buy

spending because here's my productivity but yeah yeah true but make the excuse for yourself whatever excuses and then spend a little money nothing truly ties you to it like when you do something investing and it helps you in the real world and it helps you monetarily in the real world yeah man dishonor is the only purpose of money you get the money spend some money man if that's your goal you start at a million dollars and you reach 500 million in couple years not couple you're good amount of years right and you just never spend that money you're not rich yet yeah you just have the water you have a big inheritance but whoever gets it when you're done oh can you imagine that can you imagine making all of this

and then just dead dead what's the point what is it even though i'm frugal with actually spending money you have to take money off for the market. Yeah. Yeah. You have to. You should. Fruits are your labors. Yeah. But my route is to the gratification. So, you know,

I know where I want to go. Oh, well, always. Of course. Yeah. But the truth is, as we progress, we change and we grow

more and more. Point on the US market, we are talking about where I want to reach. Basically, I've been mentioned and I've seen that target out there what i do like about we're reaching for socializing markets we have more locally we have more reporting we have more people talking about yeah we're on a

podcast talking about yeah our journey on the market and our thoughts or insight on the market. We have Kahlila launching a whole show where she talks about the market. Money Mondays and taking stock. Talking about the market. In the US, yes, US is the benchmark for developed markets right now, sure. But in the US, you have a lot of reporting on the market. You have people pushing to the public unbiased real information on the market. You look on Bloomberg, put in a whole video,

I watched a whole video today from Bloomberg on WeWork and the fall of WeWork. Ah, and they don't have to worry. They don't have to worry. They don't have to worry about certain things. I get what you're saying. Because this is general market commentary. We're talking about what's happening in the market.

That's right. The people on the market, the companies on the market, and the people in them. So I really like that the demand is there for something like that. Because anything pushes Jamaica forward. Because as we talked about, Jamaica is the market the investment field today you still have people left out of it because you sure you have thing there people investing but now you have way more people investing so more people are paying attention so the fact that people are people will want to consume something like that it's saying a lot to me my barber yeah tell me say yo sister work at work at

within the JC group I don't want a lot of nothing within the JC group and she's been telling him to invest and him go invest in Wigton and make a good money and him say where is it

and him change him whole mindset and him business and everything based on just looking at market so now he's sitting in the chair

and him say boy then I I read some free information I get out for you and you talk about it. And I say, boy, I can't charge you. So, that's where we talk about it. Exactly.

So, yeah. So, yeah. My barbershop is talking about investing. Everybody is talking about investing. And it's changing the entire culture and people making money. Yeah. And money. We act like we're forgetting.

Money changes people's lives. And other people in Jamaica don't understand how much money they have. Financial literacy. Taxi, barber, they have good cash flow and if you check

the net amount of money they have at the end of the month because a lot of them aren't taxed in turn. They aren't taxed unless they're doing something through the bank or whatever. Right?

Which a lot of them don't. Make better money than people sitting behind a desk every day oh people don't know that people don't know that they look down on the barber yo

let me show you finish your point and then I'll say something because my barber that man know himself like he I don't think he fully understood

but that man is like really smart guy like I've been trimming with him from a small small he was in like his low teens at high teens at the time when he was streaming so he probably just done just on high school or whatever but he can tell you one of the people in more of the drive because man go to university you know

send him so he said make you say you come from country come king some leave with him anti while him go on work him thing and i said he wasn't making much where he was before because it was an apprenticeship and then he started mounting branch out and the man taking money said himself go university go learn business wow did a business thing there at ucc and then here he's barbering and prop implementing. I think I mentioned before that he has a thing there. He has the thing from NCB, the mobile... mobile... mobile... Quisk.

Not Quisk? No, man, not Quisk. Where I can... Oh, you mean the pointer sales system. Yes, yes, yes. I've seen a couple of people with those actually.

Man comes and says, yo, I see a thing there. Every day, my clients, every day, my clients day working working in i don't think that working clients are in the in industry but not not financials but to the desk every day and get the money by the bank account and all of us pay him in cash because i'm no say when we're gonna we're going to him we have to stop at the 80 start our car and remember the only money i'm stop at the 80 so he said you know what I'm saying start our car

and remember the only money in place is the car so you don't say everything run through him I hope him charging people for money the thing is I don't think

the people around him doing it at all through him they don't they don't look at it because he mentioned I mentioned he said

he mentioned he said like you know how to do that man I think everybody is throwing on throwing on him doing that man like i think everybody is throwing on throwing on him doing that as if they don't think it's a forward move but they don't think him allowing people to pay by card is a forward move well they're about to learn but i can tell him no business like he does inherent understanding of value when he moves he was at a good place

before where i think they basically look nice and posh and but he said he was at a good place before. I think the place looked nice and posh. But he said he was paying a low rental fee for his booth. But the owner said, oh, bill gone up. Her bills for operating the place gone up. So he must say, we are paying less than market. So nobody here will mind paying an extra to cover the bill

and I'm sure the bill is not that much more yeah so like in other words raise the rent yeah raise the rent he asked for his landlord

to raise the rent but the landlord never take it she was fed up with it and she said no but to me that matter no business yeah

if you're customised in a gig charge me more exactly yeah yeah so he moved out he's in the same area but he moved to the front and when he came he put up a price sign on the services he offers and the price is for them the man then there's a people in the barbershop look around. The other people that work there. And they say he's more expensive than them. And he thought, that they thought, that they would lose business to him.

Even though he was more expensive? More expensive. Because they know what's up. Him, money come through same way until the man them say, here, we're going to raise the price too. Look at that. This man in here making the same

traffic I make. Less traffic because you make more profit per person. But then say that if a man can come in that don't know any of the barbers in here, he will look around and he will see your sign and say, that's what the price actually means.

I'm not going to ask you your price because the price of trimming is up there so yeah I'm not going to go to the student because the price is over here in place you're not going to go in a place and say

ah he charged a thousand for trimming how much you charge I'm not going to say a thousand for trimming everybody yeah because he's not sure what's possible so everybody say

let me raise the price too because the same business the same business is not going to change. Well, on the flip side though, is he a good barber? He's a great barber. He's a great barber.

That's the thing. The quality has to be there if you want to charge for it. The quality has to be there. Yeah, man. So you can, to a point where, no, they raise their prices with him. They're at the same price range. And they know it don't make sense to drop back. Yeah, you can.

Because they're in the market. If him raising price, my price raised too, you know. Because he must be signed. who wants to make less money but them also know that at this point now they have a competition quality quality that's where it is the convenience now with the card yeah in the forehead so shout out to baba gmail big up dandan you know if you're not up on twitter he forgets that post he's on ig where where in place there busman right out the front right out the front right out the front Target Park Road

right there so Target Park Plaza right out the corner but at the front okay so big up

big up big up understand business understanding business is the key to do any of these things yup I'd ask a couple of questions

we know we're talking for a long time so I'll throw in these things. I'd ask a couple of questions. We know we're talking for a long time, so I'll throw in some things, but I'd ask on Twitter if anybody had any questions for us. People had a couple

of questions. We should probably go back to the question from the last time too. Well, maybe we can do another episode

because I don't do the work behind us asking these questions. One, we'll talk about the hottest thing in the market

because we're recording this close to when it happened. The hot egg and a cup of coffee. The latte. Oh, the latte. The latte. Ah, man.

Big up. Big up. Big up Chris Williams. Big up the latte boss, Chris Williams. Yeah, man. I don't know why people are so angry. And it's not that I'm not aware of those. Yeah, I don't want people to try try framing it as you'll be insensitive.

Because people try to frame it that way. People always frame things that way. But if you follow me, all right, maybe you just have fun with me. If you follow me, in the last year, maybe I get cussed off because I was a person on Twitter saying that hosing is inordinately expensive in Jamaica for a regular person. If you go back even further their tweets I mean saying things like I find it insulting that every if we go back people can see the older tweets that I've done I've always been on hosting in Jamaica it's something I've cared about I saw a tweet the other

day from a I read it from I think eight years ago where I said I'll never have a mortgage I don't want to have a market I don't plan to have a yes funny how that kind of shift no in terms of i said with with some caveats um and the caveat is not that i want a mortgage the caveat is is me saying i mean at this level if you don't have a mortgage but you do want to buy a house you have to buy the house cash right but at this point where i'm knowing my financial sense there's no way i'm taking up 30 million dollars and buying a house I can't do it I physically can't do it

so I would take the mortgage and the investment and have to simply pay the mortgage and I don't consider having a mortgage if my investment

pays for something I didn't pay for it shout out to Signos Signos dropped a nice dividend with it I flew back to Jamaica first class

and the Signos dividend was more than the they I flew back to Jamaica First class And the Signos dividend Was more than the cost You know I don't pick up my net Actually Actually get the check I don't check I

You go find out where that is I didn't sign a mandate Where my account is So I need to go sort it out People If you're investing Make sure you talk to your broker Yeah

Get the dividend mandate So you don't forget No check You don't forget No where Make it just The dividend just show up In your bank account

Or your brokerage account Yeah That's the way to do it but big up signals for that one you're on your first last trip yeah boy them pay fee thank you signals shout out for that um and american airlines so yeah well just signals big up signals big up signals for that but um yeah i don't consider those claims valid but i understand it's people in them in them heat and say anything and oh you're being insensitive one well yeah i can't speak what i think was wrong was the calculation of the the latte business two lattes a month two lattes a day a thousand dollars a latte wouldn't be 130 thousand dollars a month How much would it be?

$2,000 times 30. You're assuming that they drink it every workday or every day? Every day. $2,000 times 30. $31,000. Get a manicure. $30,000. $60,000 a month, which is half of a cheap mortgage. So for a year, that's $720,000 for the year. You're not paying

the $130,000 to pay half of it. Almost half of it. Somebody tell me once, a rough, rough, rough, rough, rough calculation for a mortgage is about 2% per month. He gave a price for the mortgage of $130,000 because the price is the only thing there. Yeah, it's a specific thing. So it wouldn't come to that so understanding if you say boy you must run on that one day isn't it yeah but but the people were people were upset about that the team said that but i think what what framed them being

upset about that was that he was tying it to middle class the middle class comment hurt people and the um the latte thing bothered people the middle class comment hurt people. And the latte thing bothered people. The middle class comment hurt people. And apparently it really bothered them because he said, we, like us middle class people. We in the middle class. Jamaica have a very wide middle class. Yeah. All right.

So I made a tweet off and I said, the scary thing might be that he's not being wrong. I mean, I'm jumping into the joke. I'm like, yo, hey guys, here's a scary idea maybe he's not wrong maybe he really is middle class and if he's middle class what the hell are we some people got it some people never get it some people i'm sure vex and says still not getting below let me talk straight and i'll tell you what i honestly think all right i personally believe so i don't know chris williams i can't say i've never met him i did meet him at kalila's thing shake him and cook i don't know him to talk he's not my friend i don't know Chris Williams. I can't say I've never met him. I did meet him at Cali Lessing. I shake him and cook. I don't know him to talk. He's not my friend. I

don't know him like that. But I know, you know, him present in the industry. He's proven. So he made this comment and I saw it and I said, okay, let me tell you what I honestly think. One, is he middle class? I don't know the man money like that. But if we're going to work with the Jamaican way where we look on people and just out of the ear judge what their money is out of the blue, let's play that Jamaican game that we can all play.

He works at Proven. He's the CEO of Proven. Peter Bunting owns Proven. Peter Bunting is considered a money man in Jamaica. Generally, you know, we'll ask a control person who isn't here,

who isn't involved in investing. So Bam, just off the top of your head, Bam, our producer, off the top of your head bam or producer off the top of your head who you think is richer chris williams who runs proven investment he's a ceo or peter bunting who is like a large shareholder he owns all right bunting money up people know that in Jamaica, right? He himself has spoken about bills that he's paid for large organizations out of his pocket. So, the money up. If you are Chris Williams,

you understand money and you have seen people like Peter Bunting's money. Hold on. Here's the thing. I'm not shading anybody, but Peter Bunting owns how much approval? Off the top of my head, I think 15%. 15. Not 50. not 5-0. I think about 1-5.

Could be wrong. We'll get it right. You check the show notes. Or if you're not in the show notes, go on jamstackx.com and check out the top 10 shareholders for Proven JA, Proven Investments Limited. And I do believe that Mr. Bunting is, is Bunting a doctor? Is he is he dr bunting i don't know

you don't know he doesn't like a carrier either all right but i mean mr bunting if if he owns it he's not like a hundred percent owner not 80 owner so i in fact i will check for the people so that we're not saying anything incorrect on the podcast i was going to look at the quarterly what i say let me give something that people can look at and understand if they're listening to the podcast and going in so i'm going to look at the look at the um annual so the top 10 shareholders the top 10 owners have proven of course mr bunting is one of the largest owners not even 15 he owns according to their 2019 their 2018 annual results 2019 annual report sorry he owns 4.8 percent approval now there's also nika limited i don't know how much that is who that is but is he is is

is is that something that you'd consider before so chris williams is considered in jamaican terms to be rich but not as much as peter bunting peter bunting owns five according to this so i'm sure maybe he has another company and yeah that yeah maybe it's on there. But at the end of the day, this is what we can see that he owns. Since we're playing that Jamaican game, we try and watch a guesser pocket, right? So if he owns five, less than 5% of it,

and Chris Williams is not as rich as Peter Bunting. His owner. His company owner. Think about that. Where's Peter Bunting then? If Chris Williams is not middle class as Peter Bunting. His owner. Yeah. His company owner. Think about that. Where's Peter Bunting then? If Chris Williams is not middle class, you say he's rich, what is Peter Bunting?

And Peter Bunting only owns 5% of it. Yeah. Peter Bunting only owns 5% of it. Leeching owns how much percent of NCB? And NCB is much huger than that, right? And he owns much more than 5%. And a whole heap of people in NCB, top 10,

the NCB shares in the top 10 are worth more than all of proof. Well, all of proof, I don't know if that math is right, but maybe. Definitely more than all of these people.

And those people wouldn't necessarily consider them as rich as Leachian, but would consider them richer than Peter Bunting just based on what we can actually see.

So we're not guessing people money here, we're guessing, we're seeing how much they share, them publicly own and multiplying that under them names

so we see the money them have. if those people are richer than somebody that we consider to be super rich and then somebody can't be super rich which is peter bunting as a company one of his employees his top employee star employee chris williams says middle class like me maybe he really is middle class because he knows the depths of riches that are ahead of him when i hear things like this i say i think i said earlier i actually want people to start investing because and to be informed with it because you see a lot of you see a lot of the money in jamaica because you see where people own things you see who own what you see where the money is jamaica has a huge wealth gap yep the middle class is stretched

because the upper class and the lower class is so far so far apart so lower class is is large but in terms of amount of wealth they have compared to the middle class it's very different and then the comparison to the upper class middle class there's a big gap between the middle class and upper class yep so there's a big gap in each of them and with a wide middle class it's hard there's no there's just no going around it and then here's something that compounds that makes us even harder the truth is we have been financially illiterate for a long time as a people so we don't actually know what the hell middle class is what middle class is in jamaica and the startup in jamaica is is only for jamaica yeah a middle class person from america comes to jamaica and they're rich rich balding yeah they're rich

they're not really rich i hate to cross borders but you have to because that's what we're comparing against yeah sure and we can say maybe he was doing internationally if you want to go into completely if you want to go into completely like world scale so say what is middle class

worldwide that can be interesting but what I don't know what to say other than the man might have

seen enough and known enough to know that he's actually middle class assuming that he wasn't being tongue in cheek which I think he was he probably was

but in his space in his space he's definitely middle class and not to be in his space not to be that in his space he sees a lot of he sees a lot of incomes

he sees a lot of money I know which space I work in you see how you can get a good gauge on how amount of money

people have in Jamaica a lot more peopleamaica a lot more people have a lot more money than you than generally think they do yes and what people think of as money is not always always yeah yeah and there are people that we just are have always been traditionally rich because maybe they inherited they come from their families whatever blah blah blah but they don't they're not actually cash rich they're not actually cash rich they just have the family company

and they have assets to lean against them so don't knock the assets yeah definitely on the flip side they have the protection but yeah

so I think we have a I think we have a poor understanding of what money is but next one on this point on

yeah this i just big up the latte boss i thought it was funny i thought it was a marketing in terms of marketing i was working hard but i was laughing my boss was laughing i was at the reactions because the memes that were being made up were hilarious to be honest oh yeah oh god the memes and then the name so i so that's another question i was asked my name with regards to that whole thing which is i'm mentioning so i had changed my name to latte god latte latte god and i changed again to something else and i changed i don't know something else and i last one which is what it still is although i soon changed it back i've

never changed my name before so yeah i used to be a serial name changer before actually game before actually put up more seriously my twitter yeah so my i used to be a serial name changer before actually game before i actually put up more seriously my twitter yeah so my i think my name is out my thing is more about me joking around and things than anything else mine too but i got a little bit serious about investing in things because i actually love it but i didn't talk about it with as much people as i want to talk about it with so so now this is opening up. Get ready for the DMs. Trust me, I get them. But I choose what I answer.

Yeah, well, it can be stressful. I don't think people know that. Oh, no, it's very stressful. It can be stressful. I won't answer if you shot at me asking what to buy, if this is a good buy. Because I'm not qualified to give that response. And it doesn't help the person asking.

It doesn't help you. And if I was qualified, then I would certainly be paid for it because that would be my job. So I don't think anybody wants, if you think that's bad, then I don't think anybody wants to be told to provide a service that they provide professionally for free. Next. That's it.

Yeah. So I thought that. I wanted to wrap up the middle class thing because there is a global middle class calculator there's an article that i saw somebody tweeted out and um big let me not i think i'm telling them don't want to stress either so i won't i won't shout out the person but this person has told me specifically i said to them i just said specifically don't want to stress and don't they don't want nobody giving them the hard time because i'm investing but the article is about the article title article is where do you fit on the global income spectrum

i'll read the first line from which is that by 2020 half of the world's population is expected to fall in a global middle class according to data from the brookings institutions in america anyway the important thing about the article, and it's definitely in the show notes, is that there's a calculator. So you can put in how many people live in your house. So I put one for me. And you tell which country you're in. And it tells,

and then you put in how much money you make for a year in US dollars. So, like, I just passed Trinidad and Tobago. Definitely Jamaica is on it. Jamaica. Thank you. and have a household income of good all right so article has a the article has a calculator in it so you can put in how many people live in your households have one person my own just do it for me and you have a household income of let's say somebody about four million somebody's nicely paid and they're single right so i do it for me. You have a household income of, let's say somebody, about four million.

Somebody's nicely paid and they're single, right? So I'm saying 35,000 US dollars a year. And it tells you if you fall above or below the global middle class. So according to this, if you make more than 35,000 US dollars a year and you live in a single,

you're a single person living in Jamaica and you make more than 35, us a year you are above the global middle class your income you're in the according to this calculator oh uses real income and real yeah oh that's actually i read that so it says a 35 000 income in a 35 000 us dollar income in jamaica has enough buying power to put you in the 99th percentile globally. That means that you're richer than 99% of the people in the world.

Based on your REIT income versus REIT expenditure. That's almost 5 million Jamaican dollars a year in terms of income. I'm sure people want to see something cheaper. Let me do it at 2 million Jamaican a year what's your rating on we use them said the rate of fly is only at 140 all right so 14 285

let's say 14 500 so if you live in jamaica and your salary is 14 500 which is you fall in the global middle class so i think the latte boss might know that which is my new name that it's too latte to apologize guys all the people apologize because i can't tell you something if you make two million dollars a year in jamaica you can't afford a mortgage if you're paying for anything else literally anything else if you pay a phone bill you can't afford a mortgage yeah you have yeah that mortgage is not in a not in a nice enough house whatever you know let me not say that we tend to be very kingston oriented because you can get a nice piece of land you can get a nice house

outside of kingston yeah yeah and if anything we need more of that development moving outside of kingston yes yo i was just i know you have the same thought. Drive around Portmore. Portmore is prime for. I'm not even going to talk about that. Wait, Portmore is prime for real estate development and commercial development. You know what, I think I ran into it last time. I was here. Sometimes we just don't say something until after we take a position.

Okay, okay, okay. I'll tell you don't worry about about it I am agreeing with you I didn't want to go into No details Sorry I know people don't like that I'll go back to the global middle class thing guys Check the show notes You will see it there

It's a Washington Post article It has a calculator in it I might tweet it out too So Look out to see if you're Wearing the middle class If all And how it works

It's an interesting article also Shout out to the person Who Who shared it to me she knows herself um another question yes let me give you another question because we've been talking for a while uh i think somebody wants us to cut comment on this article that was written today i was not the person who wrote the article for you people asked you how to invest that sugar daddy money again i was not the person who wrote the article for you to ask how to invest that sugar daddy money again i was not the person who wrote this article buy some stocks all right so i haven't read the article but guess what that's from the headline is what you need to do you get the money yeah yeah if the money can stretch beyond your needs your immediate need yeah i feel like you need to eat food in your footing there and if the money can

put you in the place where you want to be comfortable you need nails and whatever you can track it you're sure that happy yeah the rest of that money go invest it because you need to reach a point where you're sure that is a choice and if it was a choice at the start then i'm not then that that conversation wasn't that that point was not for you but you reached a point where you're fully comfortable in yourself you don't need it yeah man you're cool with where you are you're cool with who you are you're cool with who you are financially so invest the money then do well like make some real moves with that money yeah that's money that's not yours that's wow imagine that somebody's giving you money and whatever you want with it i know people that you know all right so my girlfriend is looking for a platonic sugar mama

for me oh you are funny i thought you're going to go she can't take that stress platonic sugar mama so if anybody out there wants to mind me so i can help mine so i can help pay for things for my girlfriend that's fine like hit me up hit me up that's it that's a platonic for a reason yeah that's what you think so which which big one you think i take good good money then i go to gym all the time big up alex and marty yeah yeah yeah do good things in that space yeah really good things in that space but yeah

you think this woman will take her hard-earned money and give you and spend it off on a young girl and she don't get

nothing as well what are you going to give her for that dear lord I know children listen to this podcast let me manage it but tell me

what are you going to give her for that what do you think she's going to want for that are you going to carry her for dinner no no no man I can't talk

about stocks okay that's a good deal I don't think you make it you may try to start out to your headspace is where you want to invest something what do you say and you make some more money you can help me mine and take care of my girlfriend everybody everybody everybody we're planning on them very committed wow i'm looking for the same thing but not platonic guys feel free feel free to to to send the dms asking about things other than stocks good lord boy you know in jamaican man's anything they upload might have five great get up and say around the way me you're not planning me not so here are the headlines of the article. Here we use more investments. Start a business.

Ask for gifts. And that's G-I-F-T-S. Ask for gifts. And let me tell you the first line from this thing. Whoever wrote this really, and again, I'm not the person who wrote it. Sis, don't ask for KFC or Burger King. Ask him to pay real bills. Do you have a budget? Wow.

Do you have a budget? This was in the observance. Do you have a budget do you have a budget this was in the observer do you have a budget if you if you do then get your sugar daddy to offset your ex in the observer it makes sense that's a good one bro wow i'm not saying it's not good advice yeah like you have that bill like you don't have to pay any more because you're gonna do it girl wow makes sense wow because any money you're not spending is more money to your future so yeah work it offset your expenses money that you have spent save save save well guys don't save invest invest yeah use his connections chances are an elderly man with his money has plenty of connections

and you can smooth him over to use a few of these to help you wow that's wild but yeah invest if you're doing taridos do it do it yeah wherever you get money from wherever you get money from yeah make it work for you make your money work for you yeah invest in the stock market the jc is the number one stock market in the world yeah that's not a joke thing that's not a joke yeah yeah chris berry i saw was talking at i saw big up chris from ue on twitter who had is that chris berry no that's not that is not chris but there's a good thing he said i took off he might have said i said that right but he had put some notes from what mayberry's live forum was oh yeah and um you're talking about gary gary parrott yeah and the things that gary had said and chris had said that because i think it's both of them i don't know i only saw gary i

mean i only saw when you said gary i didn't watch it i was very busy that day okay so some of the things were really really good tips and one of the points he made was the fact that yo isn't that joking to say that we have the number one stock market in the world that's a light thing and to do it more than once that's not a light thing yeah consistency consistently and you have less than a hundred listed unit listed companies still that's not I feel justified when I hear things like that and I see

things like that other people saying it I was out of my mind with what I saw it's actually something sensible

so big up the people I just mentioned and guys however you get your money I don't care

how you get your money however you get your money invest it don't save it use it to invest do you know that's one of JSC's actual mandates how you get your money. But however you get your money, invest it. Don't save it. Use it to invest.

Do you know that that's one of JC's actual mandates that they've always had? One of their mandates is that they want to bring home the savings and invest in her. They want to allow

greater savings options for Jamaica. Yeah. And more lucrative. I felt so good seeing that. I remember I have an article, I'll link it in the show notes also that says you shouldn't save you should invest you look at the year i wrote that article and i can tell you i put it up i think i put up at least a year or two after i actually

wrote it so it's a long time i have these ideas that people should hear but anyway let's start for a long time give them some quick shots into halfway through half earning season uh i'll ask one more twitter question and then i will i will touch two twitter little things that i saw just now one of the things i somebody asked was um how how how do we expect like the the the person put the failed but i don't think there's any failure i think they chose not to do it so i said the put off the sagicor deal with scotia life where they're taking scotia's insurance companies what what how will that affect affect the deal so all right so it won't affect the deal per se because i know i've not i've not seen where jmmb has i've expected acquisition of the

sagicore shares by jmmb so you're asking right so it affects scotch sagicore and by JMB. That's what you're asking, right? So how will it affect Sagicore and JMB? I guess. So for both of them, it's a lost opportunity because they had an industry player leaving industry and giving them their piece of the market. So that helps their organic growth and it helps by inorganic growth

where they get new customers, they get a new portfolio and they have a new touch point to attract customers. So that's an opportunity that they don't have anymore. Yeah. In terms of affecting current business,

it doesn't directly affect them more than the competitor is still there. The competitor can still attract some of the market. Yeah. so that's where it's affected but the current numbers for the company are not actually affected yeah the current numbers are still on if you believe in them they will be on track for what they are now so that's my two cents on where that affects them jmmb will be buying into Sagicore Financial which is still

in talks with Scotia outside of Jamaica to acquire those insurance business. But the Sagicore Group, I don't know. I don't know if they are.

Yeah man, they said thing there. The talks still continue out there. So the only part is that Social Jamaica Social Jamaica's

insurance isn't being sold to Sagicore jamaica's insurance sagicore financial is still talking i'm talking to the rest of some caribbean countries about that about the acquisition of the insurance business okay so they're still exposed on so demb is still exposed from the sagicore financial side but the exposure that sagicor financial got from sagicor jamaica is no longer there i got you i get you i get you so the actual question was from somebody named at andrew frzt yeah um the actual question was how do you think the partially failed scotia insurance will affect sagicor insurance mmb's bottom line and how do you think the market

will respond affect their bottom line I think that question to me seems to smack up the usual

thing where people think that JMNB is buying Sajikor Jamaica they're not they're buying

Sajikor financial which owns all of the Sajikors in the region and majority of Sajikor

Jamaica yeah and majority of Sajikor which I share with regular shareholders you can go buy some and Panjam yeah yeah and majority of Stratford, Jamaica. Yeah. And majority of Stratford, which I share with regular shareholders. Regular shareholders

from Jamaica. You can go buy some. And Panjam. Yeah. Panjam owns 33% of it. Yeah. I hope we answered the question there.

Chris Omui had a question about the latte Scandal of a Name. We covered that so we'll change it back. I'll find it for you. His name is Chris Omui. Yeah.

He shares the name of the person i'm asking about persons chris seems to be a very popular name in circles um two brief discussion middle class we did that right look ahead of the game and the sugar daddy money chris you get all your questions answered big up um somebody asks if we could tackle something that david tweeted up david um david said that ncb has indirect ownership of guardian life limited in jamaica through their guardian tt holding i wouldn't call it indirect they own their own guardian life yeah limited in jamaica um that that's it yeah well i see why i said that one 62 percent of it but if we got it at the start once you pass 50 you're a subsidiary subsidiary so you're a part of ncb group yeah so if anything

we we we make we have a we have a ncb piece so we own that guardian indirectly through ncb um the other part of the tweet he said, Guardian Life is the provider of Medicus and Sajikor Utamika is the provider of Sajikor Health Insurance and Sajikor Utamika is owned by Sajikor Financial Corporation which is being acquired by AlignVest. JMMB is going to acquire 22% in AlignVest. Proven J owns 20% of JMNB, GLJA.

Connect the dots and you'll see the nature of what owning one firm can give you exposure to so much more. I thought it was going somewhere, David. Yeah, me too. Okay. Okay, well, I mean, it was a separate thing, I guess. I think David was speaking on it. Yeah, I get it. Okay, so she is asking us, can the fall of one tumble the others as well,

or are the stakes in each one not big enough to do that? That's a nice enough question. Yeah, people always worry about failure. It's a Jamaican thing. The first thing we worry about is the failure. It's a good thing to have any wonder. How it all go bad. For years we get beaten, my lord.

Proven. Exactly how it work. Proven own 20% of JMNB, which is going to own, let's say it's in the future. So JMNB owns 22% of Sajikor Financial Group, which owns

Sajikor Jamaica, which runs Medicus, I guess. So if Sajikor Jamaica fails, then JMNB, sorry, they do not own Medicus. They're mixing brands. I don't want to get in trouble. Guardian owns Medicus.

Medicus is a Guardian product. Sajikor Health has whatever their system is. They have their own system. I don't know. So I think... So if Sajikor Jamaica were to fail, how big is Sajikor Jamaica within the Sajikor financial group

the cross Caribbean entity yeah well I mean so will that will the Jamaica operations the failure of

Jamaica operations cause the failure of the Caribbean operation if that if that for so

if you can if you think that can happen, then Sajikor, Jamaica, Sajikor Financial Group fails. And if you want to affect 22% of JMNB, JMNB owns 22% of them. So the sharing associate. It's actually a complicated one. It's not complicated in, in, in terms of the whole dinner.

Cause I can see the answer. All right. Just think of it simply. Uh, Sajikor Jamaica fail. It's going to hit Panjam and Sajikor and Sajikor financial corporation. Right. It's also going to,

if it hits Sajikor financial, it's going to hit JminB, which is going to hit Proven. Cause Proven owns 5% of the same thing. By virtue of holding 22% of J-Main B. But can the failure of Sajiko Group, can it ruin J-Main B? Ruin completely, no.

But I think it'll just be rough. It'll be rough because you're spending a lot of money on it. Here's the problem. Most people don't really understand what failure actually is. It's a big snowball, bro. Yeah, most people don't really understand what failure actually is it's a big snowball bro most people don't really understand

what failure is but can things like that happen? yeah sure if Guardian were to fail would it hit NCB heavily? yeah but remember NCB got to where they were going

without Guardian so it would affect them because they spent money on it well they had 32% of Guardian for a little while but it affects them because they spent money on it and then that's a and it's them that's a cost that they lose yeah and it's them we have considered that it is actually them so it's part of they would fail yeah um but with the fail the

whole group these are very so the thing is these are very diversified companies yeah man and that sort of thing is a big question for Jamaica failing how wouldadiqor Jamaica failing, how would they fail? How would they fail? Sure. Yeah, there's not enough information to truly say. If it fails in a vacuum, so it fails while

the rest of Sadiqor Financial is living and going strong, then Sadiqor Financial has something to fall back on more than does

Sadiqor Jamaica. You know what? Let's save this for another episode and we can dig into it because of how important it is when I get like all the things that I get,

like the indices that I get, like if NCB or... I can't even say if NCB... I'm thinking about indices because you're talking about how it will tumble down and affect everybody else. No, I think she just saw and said others and I don't think she truly got it.

And I don't think... When she listens to this podcast, she can clarify. But I don't think she knows either. Because think about it. I've mapped some of these scenarios in terms of failure when it's a situation

like the US failure. That's what I think. But we think about the US failure and we think about FinSAC. Most people don't even really understand local FinSAC. That story isn't told because 22 is the step on.

Yeah. I think I'm probably informed about that. Yeah. Nobody ever talks really about it because the people who are involved in it, anybody who made the good decisions or the bad decisions are still alive and still around and they're not interested yeah big up mcb for coming through it stronger um i think i think it falls from not really understanding what the failure is and in

the u.s system what happened is that a lot of other industries were tagged into these things because they were safe. So if we look on it from a safety perspective, if Guy didn't want to fail, it would hit NCB heavily, which means every pension

would have dropped down. Every pension fund would have gotten a whole heap of value hit. And if NCB dropped, we know the local index would have dropped. It's such a big scenario

that I think we should tackle it another episode. But it's not to worry about. Yeah, yeah, yeah. I such a big scenario that I think we should tackle it in another episode. I think the snowball effect that she probably sees happening probably isn't that great of a snowball. It might be a big snowball but we'd have to tighten up her question

to show that. I was thinking of each thing in a vacuum and then how would they affect the other things. So, Sajikor failed and isn't tied to the failure of any other thing because what is this bad business oh yeah so in terms of the company financials and then just that ruin we always affect financial then sorry financial fate i don't think it will be that snowball if it happens yeah i see chris from you ask another question but i don't know you get too much question to the boss yeah man that's too much question and you're not you're not really give people a chance yeah and

is that question chris suppose you know better chris if you want to know what at least chris and anybody listen if you want to know what a listed company actually does check note one of their audited financials they have to tell you how they make money and what they actually do for the product just try to interact with the company for the product interact with the company so you know say grace what themselves and you can break down which parts of the food industry them in what them in western union do ncb you can find out the products because they're trying to sell them to you you have to look beyond you have to look beyond us you know yes you have to look at no one because that frames it but you have to look beyond no one every minute your

salary come up with an not every minute but we all saw that i come with them not every minute but says i had to come up with a new product a new line james grace them new thing there um mix the mix the mixture the food the food drink the graceful drink that's reminiscent of alaska food drink i got you yeah so you have a new new business lines if you know what they actually do what they're putting out into the space. So you can run down him, I cool him, look at him, I cool him,

and say, boy, I cool booming. So he knows what they were doing before. And he knows that there's a new business line and how well is it doing? So that's the second step. What they do and how well these things, what they do.

So how you know what they do? Note one, and then you go deeper than that. What they actually do under the things they say they do exactly well i don't want to kill too much questions because i know people have been listening for a long time um yeah i don't want to touch on so somebody asked this one i'll i'll jump from here we'll just maybe touch on a couple of actual hard socks and we'll call it an evening or a day or a afternoon whenever you listen to this uh how is the china america trade war impacting jamaica and if it's

not do you see it affecting us in the future this is based on comments made last week on jamaican china relationship i asked him to show me what our relationship was and he linked me to an article from nationwide where they said the chinese government was condemning the u.s military officials comment because the u.s military official i think was saying something about you know in other words they're saying like you know the u.s military official isn't very happy with the chinese influence in the region and the fact that you know they're they're in supposedly a trade war currently um quick answer my lord is if you hear it on the news you don't really have to worry about it right there is no real trade war because is what america is going to argue with its factory yeah that's the factory needs american

america needs a factory america look look at how much american america takes china's goods and look at the fact that despite the trade war, nobody has held fast to a proper trade war. They can see where, oh, sometimes they sanction this and then they take it off. Sometimes they're blocking it and then come off the block. And it's up and down. So it's the actual trade war where they're blocking out. We're not taking anything from China.

That would seriously hurt America's economy. Yeah. Apple is what, the largest largest company i think they said and apple apple has apple takes apple sells it was a big thing about the other apple sold iphones in china for the first time iphone c um i think they do have production they have they have some things that are coming out of China. It would be very weird if they don't, to be honest, because it's Apple and it's such a big company. You know, what China does for the manufacturing in the world.

And I think even the other day, they had something saying where Apple got approval to have some manufacturing line staying. Ryan can correct me on that if I'm wrong. But basically, as Randy said, China is a factory of things. It makes sense. We have cheap labor over there

and labor in the US, the price of labor is too high for companies to sensibly move. If it moves, then the bottom line gets hit at the same time. The fact that they're moving itself and then the pain

the workers that they're moving it to. That's the whole reason America's factory is in China because it's cheaper, isn't it?

Exactly. And China has gotten so big on the international stage in what they're putting out more than just manufacturing. They actually have a large stock exchange,

a large... The companies are getting so big. The companies are producing. The companies are pushing to the world. America, no. America, they kind of do have to take a lot of that. So I don't think there's actually a proper trade war where we're done with China.

There can't be. And already by the time we're seeing this, it has already started ramping up yeah they have enough they're having talks they have it they must and yeah yeah don't worry about don't worry about that my lord don't worry about that that's not something to worry about if you see where your opportunity you're in a business where you're up where your business is contingent on the trade war happening yeah and even then i will tell you do not bank do not bank on that don't put money on that if anything be shorter and do it for the time you think makes sense so even if you

think it's like last three months before two months yeah check when the u.s elections are yeah yeah just i'll leave it there yeah i'll leave it there um we'll touch some stocks we'll do some stocks before we're up because we're talking for a while half earnings season like we said because a couple of things are out we spoke about mds already um what else you have anything at the top of your head uh we mentioned signal so i'm a good outlook for signals because of but here last year expect a good year coming in birder dropped some results i suspect that they wouldn't be so hot well let me tell you the exact numbers oh my god

9 months results right for the period ended September 30th and they are revenue is at for the quarter 534.2 million

versus 607.8 million the same period last year so revenue has fallen for for them the profit before tax in fact no straight net profit net profit is 8.9 Last year, Q3, last year it was $8,970,000. And this year, it's $7,385,000. A company like Berger is hitting those numbers. What do you mean, in terms of profit? The profit numbers. Tiny though. But that's for a quarter.

Compared to MDS, it The profit numbers. Tiny though. Yeah. But that's for a quarter. Compared to MDS, it's looking close. Looking close. Revenue figure and... Oh, that's a nice put. I never thought of that. Compared to MDS, it might look nice. Oh yes, MDS and Virgil might be about the same size. Yeah.

And they shouldn't be, right? Yeah, they shouldn't be. We can't even revenue. Yeah, they really shouldn't be. I think MDS made more revenue this quarter. For 534, Virgil,'t be, right? Yeah, they shouldn't be. We can't even revenue. Yeah, they really shouldn't be. I think MBS made more revenue this quarter. For 534, where did I say, man? MBS made 560. Wow.

565. Wow. MBS is a junior market company. An inner construction boom. Wow. I love that. I'm always sarcastic when I mention that one, by the way. If we have a construction boom

but people really like to put it in poor context I think yeah I like that you're fine I never thought of it versus MDS

and it's MDS six months but you say it's on the quarter to quarter quarter to quarter alright so MDS for the quarter made 565 million

you're right and Berger 534.2 million. Wow. Wow. You see why I want every company list? Profit. As I said, it dropped from $8.97 million to $ 7.39 million, which means that...

20% less than last year. They're roughly 20. No, roughly 18. They're about 17, 18. They're about, wow, 18% drop in profit. The profit before taxes is interesting because same ratio 14 million last year and this year 9.2 oh so was there a tax credit or what kind of tax numbers yeah the tax seems weird yeah so i think something happened with

the taxes i did a tax write-off or a tax credit yeah that caused them to record if they didn't have that then the profit would be quite a bit lower because if 14 to the tax thing there it's a big company though so you know nothing happened in that tax line but the tax ratio the tax rate was lower this quarter than last quarter

hmm so I forgot to check what actually caused that and they said that revenue for the period was mainly impacted by the adverse weather conditions

experienced in the quarter mm-hmm I hear them and Carb's say the same thing yeah in the quarter. I hear them and the same thing. Brother, the quarter ended September 30th and in October the rain ended. There was some rain going on in September too.

Yeah, there was some rain going on in September. Heavy rain? Yeah, because I remember being annoyed by it. Are you sure it was during September and not October? Yeah, because... I i mean if i'm wrong it's memory but my memory sucks with certain things so let me not hold on to that one i just i have to go and check it i mean the rain that rain business that poor excuse in my in my view poor poor poor excuse but i think

it's a better excuse than Birdot to tell you something. You think so? Because I don't. Wait, you know, let me not say that. Let's see what Carab Cement excuse was. Carab Cement,

I think it was the movement of stock. That's what they said? Yeah, because people are not buying because and they said there's a delay. Was it there that said it? But somebody was trying

to explain to me. They're not explaining to me or was it, I saw it somewhere that basically there's a delay in stock that we,'s a delay in stock that we delay in movement of stock but because of the nature of the business that they sell to that they will be picked up in the coming quarter but you know that isn't the thing so maybe

i don't know well first let me tell you what their drop was because carib cement got a heavy hit. Heavy, heavy, heavy, heavy hit. They moved from revenue of 4.46 billion for the three months, July to September to 2018. For the same period, July to September 2019, 4.38.

So close, but less, but close. So the revenue dipped, right? And the profit profit they made profit last year this time of 305 million and right now the money make profit of 76.8 million that is a heck of a drop but look at kairi simmons price on the nature of the revenue drop when our revenue job look at the gross profits difference operating profit gross profit I don't tell you what my look at the wrong thing oh yeah gross profit here even before everything and never know beside this guy goes for it yeah yeah explain the thing they know so I know sorry not come I they have manpower rest it basically gross profit they explain the thing that's why I want to

I know sorry you know it caught my eye they have manpower restructuring costs on this we haven't seen that in a while they said that was done it's done but

I think it's a recurring thing it's a weird weird weird expense even one year I saw where one quarter where it was on

and then in the corresponding quarter they removed it so across there was no manpower in the quarter quarter they removed it so across the time across there was no money in the quarter so the report before yeah sold it and then it didn't factor in so i think they wrote off that expense that's some weird it's weird do you know what it is no they never i can't say i have never seen them truly explain it properly yeah in my view it's always is a is

a very fickle thing give me the gross profit numbers though or the gross profit number sorry 1.27 billion this year versus 1.55 last you see that hit look at the thing there now look at the oh it's inventory so you're saying there's something in inventory not only look at the thing there look at the expenses now so they have the expense breakdown down here in the for the gross profit breakdown um yeah it's down here there we go and you can see where two i think two expenses spiked despite all the other expenses looking better i think something was equipment higher yeah from 133 million to 325.3 million and $533 million to $325.3 million.

But cement transport, marketing, and selling costs fell. Other operating expenses, I don't like that. You know I hate that. Yeah, I don't like that. You give me a full breakdown. Other operating expenses jumped from $213.9 million to 420 million. That is a big jump. Big jump. And it's under something.

And that was a real kicker in the thing there because they go from revenue fell and then expenses increase in that way. Just cascade down to the bottom line in a bad way. Yeah, but overall, I mean, overall expenses last year versus this year,

2.9 versus 3.1. But the difference is 200 million. Yeah. So the revenue will drop and then the expenses go up. So, whoops. Wow. 200, 300 million, that. Wow.

So, Carp's been going through it too. Heavily overvalued right now right no I know overvalued not undervalued you think they're you think they're undervalued based on P based on P is what I mean yeah

and of course you know the industry so it's them alone well yeah the P is 24 yeah at 59 dollars P is 24 times 24.05 times okay oh you're at 59 dollars yeah 24? Yeah. At $59. PE is 24 times.

24.05 times. Okay. Oh, you're at $59? They're at, right now, they are at $59. My gosh. They are not at $59.

Sorry. Okay. That is my average price for them. At $77. Okay. Sorry. At $77, they're at, they're at 24.

They're at PE of 24 times. You know, when we're talking about PE earlier, I meant to say that I have always said, I wondered if I tweeted it long ago, that a case could be made for a PE of 20.

Years ago, I remember saying that, that I can say a case for a PE of 20. But I don't know if I ever tweeted it or if i said it or i know i said i've been there when you said yeah yeah i've been saying it for a long time but i think jamaica is right for pe at 20 now with average jcp even 29.5 maybe maybe you're willing to say that a good pe range is now 20 to 30 i mean in america pe is crazy but again earnings over there mean a whole lot more so people are willing to pay a lot more for earnings which is what pe shows you how

much people pay for it right anyway we don't have to draw that back uh so cable and wireless going i came back right cable and wireless although they should be going through it going through it those two other companies um Power don't drop yet what do you think about Lumber company not supposed to drop soon Lumber should look strong

yeah especially with with whole I like the whole deal around Blue Power Blue Power should look strong yeah but we can talk about that

another one because we're talking to the people a long time now and I'm not giving them a treat or a podcast even I'm not going to do that so we said Berger now go let me just look and see what else came out where you looked at you looked at you like fast rich no no why not uh i don't like how the expenses moved

in relation to the profit the the revenue so admin expenses were way up and finance costs was it was up by eight million i think but the finance costs were are typically low but low i won't say low but you know it's always you have to be relative with something like that so i think they moved by eight million they had nine million regular before. So that's a double, almost a double. But for the new profit, for the new revenue they're making, the admin costs flew. And I think the reasons they gave didn't

sit well with me. The reason they gave, they said they made some celebration for the 25th year and the 1st. And HR, some new HR component for the thing there. Just open it, bro. Open what?

The fast switch numbers. I wanted to look at something else while you were talking because I know the fast switch. I actually opened them already. They're in one of these tabs. I'll keep talking until I find the fast switch tab. Yeah. So, yeah.

Relative to the thing there. But I mean, it's been sort of the bigger move to me relative to the thing there, but admin expense was the bigger move to me relative to the increase in revenue. Okay. So finance costs moving in that way, I don't think it was heavy.

So I think the proper financing for the new revenue you're taking in, sure, but admin expense move cut into it. It could be new staffing,

but I don't, I'll read it just read it yeah well i have the problems i haven't gotten to go through these numbers myself yet yeah yeah we're gonna go through you guys so look forward to get like a proper earning season episode from us we'll go through like the proper earnings that we have if we can get the right people here we'll get the right people everything right people on board we get the right people on board if not here then and i talk about it and that one i can tell you from now prepare for it to be long because we will be going into the companies that we like the ones that we like and what i want to talk about yeah uh something good for us well something good for

fast rich they did say that they didn't drop a news release on their signing for the new warehouse facility that they're sharing with Grace GK no GK Pensions they're sharing GK Pensions is financing it

oh wow so the pensions are unlocking the value locally that biggie they think this is GK's first

real estate move move GK Pensions GK Pensions oh wow and it's being managed by Larte God's Proven Wealth Limited Proven Wealth Limited yeahions oh wow and it's being managed by latte god's proven wealth limited

yeah i like that so it's a tripartite thing fosterage benefit pensions benefit through grace pensions grace kennedy pension scheme and investment manager i'm sure benefits yeah they do they do's nothing they really like. And coffee. They have a lot of real estate deals. I remember they improved Maritos in the newspaper, not just the other day, but some time ago. Yeah, they do like real estate. You know what you're going to have in your car. People really like the idea of real estate

and the people who have the money actually do. Actually do. They can do the real estate thing right. Yeah, so that's good for us. There's some good news in the future. And that's good for Jamaica because I chose the pensions using the funds that they have for something other than the usual nothing or the usual slow thing or the usual government paper right now that's this is nice this is pensions i like seeing pensions because my my pensions exposure is pensions held within

the financial sector so i see i do see i know where they do real estate deals but i can't i couldn't speak to the movement of pensions beyond that so this is good to see when i say this is the first grace a company as big as grace pensions going into that so that's huge maybe maybe maybe if grace do it it says to me that a lot of smaller pensions might not have been in it or yeah well i mean pensions by kinds of thing that a lot of people don't know they buy real estate i know where financial sector they buy into those things they have the biggest pensions so they they buy into more into a lot more than other non non

real estate companies yeah so those ones are so you'll have a pension portfolio

for a large company being managed by a real estate by a thing there by a financial company yeah

because I know Sajikor Sajikor Properties manager place over in Portmore near where the new theater is. Yeah.

I'm looking on Kingston Wars that just dropped also on the three months they're up 11%. 11%. On the profit line, yeah.

Wait, Kingston Wars moving? Yeah. Ah, boy. Nine months. Kingston Wars, I don't know. Please somebody tell me

what we're waiting on for a proper PE evaluation on that. So as in, what is your expectation of the... Stock Y1. Of the company. Uh-huh.

Why we have such a high PE on it. Oh, so in other words, you're asking why hasn't it corrected as yet? Why the price will drop or why the profit don't reach yet. Because if we have the price will drop or why the earth or the profit don't reach yet because if we have the price if we have the price that high then there must have been some expectation of something going on why the price has been that high forever forever yeah from i joined the market with some high p.e and i was like all right yeah it's and it's been there forever and the price

has risen and it stayed there because you know it's a company i'm afraid to buy you know me too i've never bought it but i've always watched it but because it's one of the first things people learn them come to the market and then go um well you know buy what you know which is good advice buy what you know and yeah guys you're gonna hear this song with the dogs they're weighing in guys yeah the dog i'm hungry yeah anyway um they're they're oh these guys are really hungry um people know it people people know we think of them no ncb the bank and i'm saying what else kingston wharves not a wharf that everything ever come through the wharf so you must buy it which i think has sustained it for a long time but it's actually a drop in terms of the pe but it's more than one time i see by recommendation go out and kick it out for years but i don't know every minute someone

come out and but they can't sit around because people about it are not by recommendation at 30 dollars even it was overvalued yeah and they come all the way up to 57 dollars now so it's still up but it was at 70 at that one point or something this is actually coming down people to be i've spoken people that tell me say yeah man it's a good one big up DJ Lengdi yeah call him government name he think that he

he pointed to me he pointed to show me Caleb was falling when he was falling the other day and he said this is a good opportunity where

if it's a high so long he never thought he would stay down and I think he bought in and he moved moved back up oh wow he went at a low for

a little while and he bounced back up I think he went to what else do you think might be at a low right now I have to think about that one more than so I like that, I think Select F is touching a low QDI I was even going to mention that, QDI closed today

what 106 yo I wasn't even going to mention that. QDI close to the hour. 106. 106. Yo. Some people are very, very happy. The NAV is a bit higher. It's actually a joke. No, that's not a joke.

It's a dividend. Remember that thing you said to me once? We won't go into it on this. We said no about how you can get. Technically, if QI is paying out X amount of dividends that they get you are getting

because they own you're getting a discount on buying X amount of dividends from X amount if people are into dividend investing truly this should be a great

opportunity for you well you know why I prefer I prefer that for MJE why because MJE has certain stocks that they plan to hold

over the long period. So most of their thing there, most of their holdings, so big SVL, the four big portfolio companies are a large part of the holdings. Yes. Right?

So the dividends paid from those companies can be discounted more heavily if MGE's NAV shoots up. I get you. Yeah. Because if those companies are growing and moving in up up and people not buying mje that means the price of those companies are moving the earnings of those companies likely moving with it very likely moving with it and the dividend payoffs will be stronger from from those companies into mje and MGE can pay a stronger dividend relative to its price.

So, go and keep MGE at $10, right? With NAV at $13, man, buy it. Well, the last, the last, the last

NAV value I see for MGE is, I'm sorry, November 8th, it was $14.33 and it is currently

priced, you can buy it at $11.29. So it is also below its intrinsic valuation, below the NAV. And as I mentioned, MJ, I'll use that one and wrap up. Yeah, the results came out.

Yeah, the results came out. Again, so, what I said, it's at a valuation, it's at a price of 11.29 and i don't know if it have a pe on it you know for workers have a pe on it but the net book value on that is 1434 according to now i'm looking at the actual finances so they have 1434 in their finances as at the end of september 30th however their profit almost one billion other thing yeah was there what was their net profit net profit was 464 million jamaican dollars versus 249.5

million jamaican dollars same period which.5 million Jamaican dollars. Which one of the portfolio companies do you think did that? Did that author that movement? That's a great question. I know that in this set of financials, I tell you that their top portfolio item is SVL,

which is 53.5%. And then below that is LASF. Then below that is Carb Cement. Then CPJ. Then Blue Power. Then Derryman. Then Jamaica Broilers. Then JMMB Group Limited.

Then Wigtown. Wigtown wasn't always there. So they've taken a position in Wigtown. Okay. But we know there's only four companies moved there. The bottom line. Their net profit. Their net profit their net profit only

four only okay only four of the com oh four companies that hold contribute to their thing there only four of the companies they hold contribute to the p l movement that's your net profit movement outside of the the dividend payments of course okay also dividend payments so the movement of those are the fvp but yeah can do pause rise within this quarter we didn't call a squatter gone high height it closed and it was started at nice and low so only four companies moved the piano um and you know that because it was said in the perspective based on how they think they're based on how they what are those four companies i have based on iris nine and how they look how they were speaking about them in the prospectus yes and those four companies were CPJ

Blupo Last F and I think I also get this one Last D no ROC so Last D was one of them no

but they do own Last D they own a lot of companies that's true they do own a lot of companies but it's a matter of what they consider their portfolio companies that is true

that they had taken stakes in that they had sold down. They sold down to less than 20%. That prospectus is a good read. It is a great read. It really is one of the greatest prospectuses. So net profit, nice, $464 million

from the same period last year, $249 million. So 86% increase in that. And the share price is still just ignored so i hope i hope i hope chris probably a nice heavy dividend speaking of nice heavy dividends um stanley mutter paid one we'll wrap it here guys i have a dividend though yeah as dividends go as dividends go i think it's just that people aren't jumping into it. I understand. Yeah, 2%. A heavy dividend is 2%. I mean, a great dividend is 5%, right?

Yeah. Speaking about dividends, though, because what they can be good for, here's a little thing that I've not heard many people talk about. Big up Philberg. SOS declared a dividend. They usually declare a dividend later in the year. They did not declare it as late. They declared

it early, so I don't think they're going to do two. But also, and Philbert pointed this out, that the current dividend is 60% higher than the dividend last year. We haven't seen the numbers from SOS yet.

But it might point to something. Yeah, hopefully point to the profit being 60% higher. Or more. Or more. Yeah, who knows. Looking forward to that. So guys,

I hope you're not bored on this one. It went really, really, really, really long. Who knows, maybe we'll split it in two. We we'll decide then i hope you're on board i hope people that listen actually like it there's a whole bunch of gems in this and look out for your proper no no yeah enough too much so um we'll probably bother a lot of people this one no guess but even better because it's me and then i had to get to talk like this so hope you guys liked it if

you didn't let us know if you do do let us know. If you do, do let us know. And look out for us next week again. It's been another earning season. I'm Randy Rowe at RTR on Twitter. And I'm Danai at HDANI on Twitter. And this has been Earning Season. Thanks, guys. I hope you enjoyed.

Peace out. Thank you.