Good Investing Talks - Why does Worm Capital invest in disruptor stocks like Tesla and Spotify, Dan and Erik?

Episode Date: May 10, 2021

These are the topics discussed: 0:00 Intro 1:07 How do you see Worm Capital in 5 years? 3:35 A shoutout to Stream 4:38 Value vs Growth - how Worm Capital sees it 7:51 Why Arne couldn't participate in ...the interview 9:30 What Dan and Eric's are doing at Worm Capital 15:28 How to filter noise and signal 18:15 What does Worm Capital's new approach mean? 23:43 What kind of companies do they like to invest in 26:39 What role does historical data play for you? 30:57 The top sectors in Worm Capital's focus 33:19 What gives you confidence? 35:53 Are you shorting in the energy sector? And also why you are shorting? 40:16 Why the effort of shorting? 41:24 What are the principles of your company? 46:36 How does digging work 49:55 What digging you did for the big positions for Tesla? 57:07 What else is misunderstood in Tesla? 1:03:09 Where did you get an idea to invest in Spotify? 1:06:12 What options could become real businesses at Spotify? 1:07:40 Why do you prefer Spotify instead of the music labels? 1:08:45 How much the self-disruption is embedded in the DNA of Worm Capital? 1:11:17 Something to add?

Transcript
Discussion (0)
Starting point is 00:00:00 Hello, Dan and Eric. It's great to have you here. You're my guest from Warm Capital, and I'm very interested in getting to know your firm. How are you doing? Good, Tillman. It's good to be with you. Yep, yeah, doing well. Yeah, appreciate you having us. You're working remotely. Where in the US are you located? I'm in Portland, Oregon today. And I'm in Boulder, Colorado. Yeah, I'm here in Stuttgart, in Germany, here down the street,
Starting point is 00:00:29 is the headquarters of Daimler, which isn't one of the competitors of Tesla, and we will go into Tesla a bit later during our interview. But first, I want to have a look at your, you had a quite interesting and impressive performance with your two funds. It was 37 and 57% since inception of the funds. Really impressive. I want to start with the question, where do you see yourself not only in terms of performance but also involvement of the firm because this is impressive track record and it's hard to keep it up but how do you see yourself in five years yeah sure maybe i'll i'll take a stab at that first it's pretty open into question and dan can correct me where i'm wrong or have his own thoughts but um you know we frankly we
Starting point is 00:01:19 don't try to focus too much on the year-over-year performance or certainly not monthly or quarterly We're just trying to get into a position for what we view as a pretty chaotic next 10 years of investing. In our particular strategies, we look for industries that are undergoing significant changes due to a new technological innovation. And so for us, this is a great time to be stock pickers. We see a lot of misinformation. We see a lot of chaos. Within that chaos, we find a lot of opportunity. So, you know, probably won't comment too much specifically on, you know, performance.
Starting point is 00:01:57 performance-wise, we just think that there is abundant opportunity right now, but there's also a lot of risks and challenges embedded in this market. Given sort of the velocity of change that we're seeing on the ground level of the businesses that we study, businesses that maybe were once considered safe are no longer in our perspective that's safe of an investment if they cannot make transition to a new type of paradigm of a technology that's being adopted. So we're, I mean, on a high level, we're just super excited about the next 10 years. We think there's a ton of opportunity.
Starting point is 00:02:29 You know, we don't do too much sort of public-facing marketing. A lot of our clients have been with us for a long time. But we're, you know, obviously speaking with you today, we're open to, you know, learning from and working with new investors. And so we're excited to have that opportunity as well. Yeah, and I might just tack on totally agree with what Eric said is that, you know, the foundation of the strategy, which we launched in 2012, was to capitalize on. these really dramatic Cambrian changes that we foresaw in the market and from our
Starting point is 00:03:03 perspective we're only going to see an acceleration of these trends so you know for those that have experience for those that are you know there's a great opportunity you know to continue to compound returns but it's really just an opportunity and you know it's really difficult and you have to execute on that as well so we're excited and we think that the next 10 years or so and even the next five years are or, you know, have a real chance to be even more chaotic than what we've seen recently. So for stock pickers, you know, we think it's a great environment. Tillman here.
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Starting point is 00:04:20 first year. So please give it a try at start.mosaic rm with the code good investing you will get 20% off for the first year you can find the code and the link also in the show notes below thank you very much i want to show you a chart and want to hear your opinion on it and if you discuss this kind of chart in your firm it's the comparison of growth and value and so are you discussing this kind of chart and also What is your implication if you discuss it in your firm? This is not like a specific chart that we would probably weigh too much importance on. I think, you know, our perspective would be, you know, while the companies that we typically are attracted to and invest in,
Starting point is 00:05:16 which are typically higher growth type of models, the distinction between growth and value is somewhat semantic. Certainly, you know, the performance attribution that you showed shows, you know, a specific diversion in the performance relative to the type of company. But that's why I think we're so focused on being concentrated in the right names because we're going to continue to see this big dispersion of the big winners and potentially the big losers as well. So in our view, at least, you know, this tends to be a pretty winner-tick most type of marketplace. There's just an acceleration effect that we see taking place as well. So I think,
Starting point is 00:05:57 you know, from our perspective, that's not something that we try to overweight in our thinking, our specific strategies. We're ultimately just trying to find the best business models in the world that have the ability to compound out, you know, for the next 10 years or so. So it's, you know, obviously something that comes up in discussion. And maybe Dan, if you want to touch on that, but I wouldn't give it too much importance for us. us right now. Yeah, obviously interesting in the inversion that you're seeing and then there are specific time periods where, you know, they got more dramatic. You know, from our perspective, we're really solely focused on business level value proposition and go forward valuations.
Starting point is 00:06:41 You know, if we thought that there wasn't going to be a precipitous decline in some of the companies that we have less favorable opinions on, we would obviously. obviously, you know, move in that direction, but everything from us starts and ends from a business perspective, you know, and then moves on to the valuation perspective on a go forward basis, not a backwards basis. And, you know, when we see, you know, obviously we've seen certain, you know, let's call it frothiness in components of the market that we're invested in, but not specific companies that, you know, we're particularly invested in. So, you know, from our perspective, it's, it's, it's really. really focus on the business and there are, you know, several market dynamics that haven't historically been present, you know, in terms of winner-take-all, or winner-take-most dynamics and so on and so forth. So the interesting chart, all good stuff, but, you know, for us, it's, you know, all of our valuations are on a forward-looking basis and we're just really obsessed with, you know, the customer-level valuation and things like that.
Starting point is 00:07:51 Some people would have expected Arnie here, who's also the founder of your firm and the brain behind it. Why can't he participate in the interview? I think, you know, I just spoke with Arna earlier today. He's focused on the portfolio. He is truly not a guy that loves publicity. I think his kind of comfort zone and happiness is really a 24-7. obsession on the book, both, you know, kind of monitoring current positions, both on the long and short side and, you know, looking for new opportunities. But he's, he's just not,
Starting point is 00:08:31 he's not out there trying to do too much marketing or publicity. So he's comfortable kind of doing what he likes doing. Yep. And yeah, I appreciate you putting up with, at least myself, I think Eric looks great. And, yeah, it's, you know, from us, everything that we try to do is, it's pretty difficult to get an edge in this environment. And, you know, even our competitors that we disagree with their investment positions, you know, we still respect everyone that's doing this because it's extraordinarily difficult. So, you know, where we can pick up small edges and small advantages, and, you know, for that, it's not having our CIO, you know, necessarily do a ton of publicity.
Starting point is 00:09:12 And being able to, because we're looking at long-term investment horizons, you know, think relatively slowly and methodically without a wide array of distractions you know for us we think that's the best use of our investment resources you know for our partners maybe at this point i also want to ask you what your roles and the firm are i already started without an introduction but maybe that's the point that we get some background on you both of you yeah absolutely um so i uh My title is Director of Research. I come from kind of a unique background, perhaps, I guess. I was an investigative business journalist and business reporter.
Starting point is 00:09:57 So I essentially, I went to school in New York City. I wrote about technology firms for magazines like Inc. Magazine, later Newsweek, I've articles published in The New Yorker. My focus was always on technology companies primarily. And in doing that, I, you know, got the chance to interview probably hundreds of CEOs, you know, high-level executives at technology companies. But on the flip side, I also spent plenty of time working with and speaking to different venture capitalists and some public equity investors. And so having gone to school for both business and journalism, you know, I think my perspective was, wow, you know, I love writing about these high-growth technology firms and eventually wanted to be able to participate and invest in them. And so about coming up on, well, five years ago, Arnie and Dan had just kind of launched Worm Capital.
Starting point is 00:10:51 Arnie had read some of my reporting. I think specifically he may have read a big cover story I did on Aaron Levy at Box, which is now public. But when I wrote about the company, it was still private and was looking for some research help and looking for maybe a bit of a differentiated type of research style. So we really like to go deep fundamental research, understand sort of the components of an industry, you know, who all the major players are really on a deep fundamental analysis basis. And so, you know, perhaps those skills as a reporter and someone who can get kind of obsessed with companies and industries and go deep on something, it translates kind of interestingly and I think well to the investing side. So, you know, that's what I'm still doing today. I'm working with with Arnie and Dan on research primarily. And, you know, I think our perspective is, having come from, you know, the world of media, it's incredibly difficult right now, I think for not just individuals, but investors especially, to kind of separate the noise from the signal.
Starting point is 00:11:56 So we're constantly inundated with information. And one of the primary skills that I think investors need to develop and really kind of focus on is being able to separate what matters. what's the headline that actually is driven by some fundamental issue versus what's noise, what's, you know, clickbait, what's something that's maybe going to capture the news cycle for 24, 48 hours, but is ultimately not relevant and not material. So a lot of my day is just spent, you know, looking for new opportunities, trying to sift through sort of the current data landscape and ultimately focus in on the companies that we own and are looking to own over the next few years.
Starting point is 00:12:36 So that's the high level of my role, but obviously we're pretty small, or Dan does research as well. Arnie obviously spends most of his time on research, but I'll kick it over to Dan to kind of give you his background. Yeah, nothing crazy, exciting. Basically, my undergraduate degree was in molecular biology, and I wasn't really cut out for lab work. It was a little boring for my liking, and really like the multifactored. element that you get in basically investing. But, you know, when I first got into it, you know, at a relatively low-level position,
Starting point is 00:13:15 and I have my CFA and I got a master's in science investment management. I was pretty shocked by the kind of legacy work done by academics and things that were presented as scientific fact that just clearly were not the case. And at the same time that a significant portion of the industry had seen, is more of a marketing machine than an investing machine. So I was always attracted to kind of individual investors who had done their own thing and had kind of carved out their own niche,
Starting point is 00:13:49 especially if they had gone against the grain and done it all by themselves. So I was working at a R.A. in San Diego, where Arnie was living at the time. And he had been kind of a, just a loan operator himself, himself just working 24-7 and he had done a significant amount of writing and I was just you know I was like this is the guy I was extraordinarily impressed with his ability to go against the grain the deep work the you know frankly lack of BS that you know we see in certain cities in the United States and you know I
Starting point is 00:14:27 was immediately attracted and you know wanted to work together with him to build a bigger firm and, you know, allow more opportunity for outside investors. And, you know, that's just kind of what we've been doing. And, you know, I work with Eric and it's a relatively flat order structure. I do all our trading. And, you know, from our perspective, we think that, you know, conviction is basically how you generate returns. And getting conviction is extraordinarily difficult to do. It's a lot easier to, you know, farm out gigantic analyst team. and have investment committees, but from our perspective, that's the way how you get middling returns, because you know, you start moving towards the average. So yeah, it's been a great kind of adventure.
Starting point is 00:15:13 And, you know, again, as we've kind of alluded to previously, we think our strategy is well set up for the, for the next 10 years or so. And it's every day is new and there's something to learn at all time. So it's been great. You mentioned the filtering out of noise and signal. Is there any hack you found or any good way to do it? No. And if you have a hack for it, you know, please let us know. I think the best hack is, yeah, please.
Starting point is 00:15:47 The only one I've come up with is time, you know, so time and patience. And I think, you know, the curation of people that you follow, of sources that you respect. I think that if you spend enough time looking at, you know, anything, it's like a puzzle. You just have to sort of take your time to put the pieces together. And that's, that's kind of what I've found across the media landscape is that, you know, all the articles that come out, you know, they all come from some genesis of an idea of an editor that has a, you know, there's some sort of nugget of where everything is coming from and trying to locate the truth and all of that.
Starting point is 00:16:28 What actually is the truth behind the story? I think that's a sort of almost philosophical question, but one that is immensely challenging. And I think if I had a hack for it, I would probably license that hack and focus on that. But it ultimately, I think, is just time and patience and sort of knowing who to follow and who not to follow. Yeah, but maybe it's also about, yeah.
Starting point is 00:16:55 No, I would just tack on. It's, you know, one of our core firm principles is that we don't necessarily believe in complexity. You know, we just try to break things down to, you know, pixel level and then build up. And, you know, I think that when we read, we read the contra opinions of everything that we do, maybe 50-50 on things that are in agreement or maybe more. And some of the mistakes that, you know, at least we perceive people to be making is, you know, silo themselves into only reading things that are congratulatory or almost conspiratory type information. So, you know, we read everything.
Starting point is 00:17:36 We read what's, you know, things that support our thesis, things that don't support our Theses and then, you know, try to constantly test that. But, you know, in terms of a formula, you know, one of the things that, you know, because it's not easily quantifiable, it's not easy to hold, is that the relative value of qualitative work and investing you know has long been denigrated as unimportant to modeling which we view a lot of quantitative work as commodity commodity work so we think that that's an edge that people can pick up and it's it's not something that you can necessarily break down into a you know y equals mx plus b or something like that one thing i find helpful as a kind of hack are the mental
Starting point is 00:18:20 models or the frameworks where you hang your data up and building them and i have a quite interesting quote by annie or from your letters added by annie it is early last decade i developed our current strategy from scratch i realized that the new paradigm shift and technology needed a new valuation models a new approach what does that mean this new approach yeah um so all value from our perspective is future value um i think what what our sort of overall is that especially in industries that are undergoing a rapid shift, where you're going from technology A to technology B, requires a fundamental new framework for analyzing these business models. So it's no longer relevant from our perspective to try to slap on a PE ratio
Starting point is 00:19:13 or look at some sort of backwards-looking metric to figure out future value. And so I think in the short term, especially across the type of universe of names, that we look at, that are particularly in the high growth business models, where we see a lot of our competitors maybe trip up is they get stuck in this framework of analyzing businesses using these metrics that are inherently backwards looking. And just to kind of push along what Dan was getting at earlier, it requires, we think, at least, you know, sort of a more focus on qualitative analysis to understand not just what's happening today, but ultimately where the customer is most likely to go in the future. That really requires an intense understanding of the value proposition.
Starting point is 00:19:58 And so when we spot something that, you know, maybe looks from a traditional perspective overvalued or something that's complex, we're actually drawn to those industries because, you know, in that complexity, that's where actually we can gain an advantage. I think another sort of Arnie philosophy is that, you know, he's a big Buffett and Graham fan. And would say that he agrees 99.9% of, with what Buffett has said, except for the concept of circle of competence. That's one area where we think that when investors get siloed into staying within their circle of competence, that enables us to get an opportunity and an edge by by drilling into it because there ultimately, as Dan said, from our perspective, there is no
Starting point is 00:20:42 such thing as complexity. You know, that is our job is to break down complexity into its into its bare essentials and understand what's actually happening and put the put the pieces of the puzzle together so our valuation frameworks really are sort of industry and company specific they tend to be more forward-looking you know they they prioritize different elements of a company's business model we really you know focus on high growth models margin expansion but certainly as arnie would say tricky valuations we like tricky valuations that that's actually where we can get an edge Yeah, you know, Arnie's background was kind of as a cigar butt style turnaround stock investor, you know, but, you know, things aren't the same as they were 50 years ago where, you know, some company might have an asset that, you know, was two X their book value and it just, you know, you could just highlight that and it would double.
Starting point is 00:21:37 From our perspective, he needed and we needed an investment framework that optimize the inefficiencies of the market that we're looking at now. And, you know, as Eric alluded to, you can't just use a simple DCF in these messy environments. So the models themselves become more basic, more vanilla, more traditional as the company grows. But the greatest opportunity for asset mispricing is when things are the least clear. And from that, we focus really heavily on different metrics than you would use historically. And at the same time, if we're looking at competitors, just because something has happened in the past is not necessary to repeat in the future. You know, always the good financial tagline.
Starting point is 00:22:32 And, you know, we think that there's a couple. market dynamics that are not being priced even accurately to this day. One is that because of the proliferation of information, the relative lack of geographic boundaries that we've seen historically, that we're seeing increasingly massive concentration in select companies. So, you know, you have to pick that company and it's maybe it's secondary competitor. Whereas I think, you know, as this space has become more attractive, I think, to more traditional investment. They want a broad basket of companies in a specific vertical change, and from our perspective, that's a mistake. But at the same time, you have to build conviction, and building conviction is extraordinarily difficult and time-consuming,
Starting point is 00:23:21 and you really have to do it over a period of years. So, yeah, you know, there's clearly value in these spaces, and we have to build a unique valuation framework model so that we are comfortable holding these specific positions. you know where you know you can't rely on you know more convenient short-hit metrics do you like to own stable companies or what kind of companies do you like to own so i think that i think maybe first distinction is you know businesses that we focus on and like to own tend to grow actually you know fairly linearly the growth of the the companies that we own. You know, we like to target companies that are generally over growing top line over 20%. I think that in terms of stability, the market will throw prices at those businesses that are not
Starting point is 00:24:16 stable. I think that what we find is that the businesses that we own are actually growing pretty stable, you know, that there's immense opportunity for expansion, specifically within maybe their core business line, but opportunities for expansion outside. But the market mispriced those on a day-to-day basis. And so we have to separate as a firm, you know, business risk versus price risk. And so, you know, maybe that's not exactly the question that you were getting after. But the businesses, ultimately, that we like to own, are growing extremely fast and stably. And there's not too many of those businesses, actually.
Starting point is 00:24:56 And I think that's maybe the fallacy that people fall into is believing that maybe there's 50 or 60 businesses out there. that are, have huge prospects and are growing, you know, stably and over 25% year over year at a, you know, significant scale. There's just, frankly, not that many opportunities out there, which is, which is why our strategy really does prioritize a heavy concentration and, you know, a pretty, I'd say, high bar to enter into our portfolio. Yeah, and I might just tack on, you know, clearly, you know, when, for us to generate successful returns, we have to be able to buy an asset that's mispriced. If we look at a stable
Starting point is 00:25:39 industry, you know, as we denigrate these kind of traditional valuation frameworks, they're pretty good, and the market's relatively efficient in those spaces. So in a vertical that, you know, has predictive cash flows, it's relatively difficult for us, and, you know, in my opinion, any money manager to get an exceptional advantage over their peers. You're just kind of of really trading around the margins whereas when we look at the opportunities in these messy spaces and again you have to be right you know there's the opportunity for very significant returns and there's an opportunity to gain a pretty sizable edge you know over your competitors you know again because you can't just use simple valuation models it all has to be forward-looking
Starting point is 00:26:25 and you have to you know be able to build confidence in your in your own models as opposed to just it's It's easier to look out what happened in the past five years, throw a simple run rate on it, and then, you know, discount it back. What role does historical data play for you? I think we, of course, that's a good question. So historical data is extremely important, right? So I think that it's all a question around how much we emphasize historical data into our actual evaluation framework. So just because a company was able to establish itself and grow to a certain size in the past, certainly in this environment does not necessarily mean that they will be able to continue that growth into the future. I mean, I think that this is really what we're seeing from a industry perspective, which is a consolidation.
Starting point is 00:27:19 Over time, the market, as Dan points out, obviously is quite efficient. In the short term, though, I think the market does have a bit of a challenge actually understanding the consolidating. of effect into one or two of the select winners. And when you consider, you know, all business and all value proposition is generated today and into the future, historical data actually doesn't really affect, you know, sort of customer level value proposition. So on a very basic example, you know, if you have a business that had a great product for 30 years, a competitor comes into the marketplace with a lower cost and more efficient product,
Starting point is 00:27:56 the historical data around your product sales for the last 30 years can be rendered pretty meaningless overnight. And so that's the danger that we find in this marketplace. And frankly, a lot of the danger embedded within a lot of the passive strategies that just hold huge baskets of stocks is that because of the sort of cost curves and the accelerating impacts of these technologies, some of these business models can be rendered pretty obsolete very quickly. that's a challenge. That's a significant challenge, not, you know, certainly for us, but for any investor today, is accurately sort of sizing up how much of the emphasis of historical data and historical success will really carry over into future value. You know, you see that playing out with, certainly in the energy industry, with a lot of these old oil incumbents saying, we're going to transition our business models. Well, if you look at sort of the history of business, the incumbents very rarely are able to successfully transition.
Starting point is 00:28:54 business models. They will put up a fight and they will put out many marketing press releases, but ultimately you have to look at where their cash flows are coming from. And if they don't truly shift capital allocation to the new paradigm, you know, this is why blockbuster companies like Blockbuster just ultimately are rendered obsolete. And it happens pretty quickly. So I think that's the danger of looking at historical analysis and prising it too high in your framework is you get stuck in sort of legacy thinking. And in this environment, we think that can be pretty dangerous. Yeah, I might just tack on it. I obviously agree with what Eric said. You know, in stable industries, it can be incredibly useful and prescriptive of the future. But in, you know,
Starting point is 00:29:42 what we do, and we really only focus in these messy areas of the market, it could have zero value. I mean, I guess the only value I would say is that even if there is a superior economic model, people's consumer, either people or business consumer patterns are still relatively slow to change. So, you know, for us that's great because, you know, you can compound growth over an extended period of years and it's relatively more. It's still lumpy, but it's it's over, you know, an extended investment horizon. And, you know, that's one of the interesting things that, you know, from our perspective, the pandemic has changed is we've seen a pull forward probably a couple of years of rapid
Starting point is 00:30:30 consumer behavioral change, if not more. So, yeah, it depends on whether it's in a disrupted vertical or in a stable industry. And, you know, maybe the only value that you can get out of it. is um you know the pace of change and you know even if things are are moving at relatively fast rates still takes a while for a complete changeover um you know um to the new business model with your investments you're focusing on i think five sectors um it's energy transportation retail cloud computing and digital entertainment what sectors or what two sectors out of this five are your top sectors? I would say, you know, energy and transportation would be our top
Starting point is 00:31:18 sectors right now that we're focused on. And why these? Simply as a function of the enormous change that we forecast happening over the next 10 years. So, you know, specifically within energy, what we're seeing is a total disruption across the energy landscape, moving from a system that has historically relied on extraction of fossil fuels to a system that is primarily based on the collection of wind and solar through storage and then distribution over a decentralized grid. And so, you know, there's a lot to unpack within that framework. But ultimately, we're so focused on it right now because we just think everything is moving towards a renewable paradigm. It has, from our perspective, very little to do, certainly, you know, we follow all the political developments, but from a value proposition perspective, the costs are lower, it's more efficient, and it's only a matter of time, from our perspective, at least, when we make a full transition to this, to this, you know, new paradigm. And so, you know, within that category, that's obviously solar and wind, but it's also battery storage, it's energy software and virtual power plants. And then, of course, on the
Starting point is 00:32:37 transportation side, that's an enormous, you know, sort of force function for us and focus area, the disruption from internal combustion engines to electric vehicles, autonomous transportation, you know, pretty much any modality of transportation, we think is going to move towards renewables and autonomous. And so for us, that's, this is, you know, the area to be focused on for the next 10 years if you're looking for opportunity. It's attracted a lot of attention. I think it's attracted some frothiness in the market, but ultimately, you know, we're so focused on those two areas as just a function of how much opportunity there is to be disrupted. What gives you the confidence that this new paradigm will come true? It's from our perspective, just a function of cost and efficiency of the technologies. So it's, you know, to talk about electric cars, it's a cheaper, more efficient mode of transportation. For many years, cost was the limiting factor, battery production was the limiting factor.
Starting point is 00:33:45 And battery energy, the density of the batteries was limiting factors. We're still not there yet. You know, we haven't, as Arne would say, totally crossed the Rubicon. But that's what makes it, frankly, kind of exciting and challenging. But if you look really kind of on a deep historical and sort of fundamental basis, the technologies have improved rapidly over the last 10 years. That gives us a great deal of confidence that ultimately we are transitioning to this new energy paradigm. Yeah. And just to tack on Eric's earlier first point, I mean, if these economics are more compelling and we do move in that direction, If you start to think of the secondary and tertiary effects of all that, it's almost mind-blowing how much opportunity that is and how much upheaval, primarily in a good way that will be.
Starting point is 00:34:43 It's not really investing base, but if you look at geopolitics and all around the world and where countries are deriving the revenues, I mean, it's on and on and on, it could be the greatest transformation and also transfer of market cap that, you know, we might see in our lifetimes. And just to tack on to what Eric said, you know, in terms of technology improving, the cost compression and of what we've seen over the past 10 years, you know, generally speaking, when you look at the forecasts that, you know, all these big agencies put out, at least historically, they've been linear, right, where, whereas nothing really happens linearly. So when we focus on the nonlinear compression of cost and the nonlinear rate of adoption, you know, that's where, you know, that's where, you know we start to really get excited about these opportunities and and that's where technology has been being adopted for a relatively long period of time now um and you know there's incentive i mean it's it's just we can go on and on it's it's there's a lot to unpack and we're talking trillions of dollars um you know that will either be made and simultaneously lost you're also shorting yeah sorry no go ahead you're also shorting and trying to stay away from certain business models.
Starting point is 00:36:04 Are you shorting then in the energy sector? And maybe you can also add some light while you are shorting besides just going long. Yeah. I mean, maybe Dan can talk a little more about like the specifics of just portfolio construction as it relates to the shorts, but I can talk a little bit more of the philosophy behind it. You know, I think ultimately any business model that relies on some legacy fossil fuel asset as its main source of cash flows, we think will ultimately be disrupted. So this ranges
Starting point is 00:36:38 from companies that are focused on combustion engines to trucking companies, even down the value chain towards auto dealerships, auto parts retailers. So we're looking for companies that ultimately will be rendered or could be rendered obsolete in the next five to 10 years. So that's the framework of how we think about, you know, how do we find an attractive short opportunity? Obviously, maybe Dan can talk a little bit more about this. You know, equity markets, it's very difficult to, you know, actively short right now. And I think it requires an immense focus on risk, risk management, position sizing, and so on. And so, but, you know, frankly, from an industry perspective, yeah, I'd say we're looking for coal companies, oil companies, any, any company
Starting point is 00:37:27 across the energy landscape that ultimately just can't transition its business model. Yeah, it's been an interesting year for the short book. You know, one thing I'll say is, you know, if we look at our strategy, it's a natural pair trade where we look at basically the dominant winners and then there's a, let's call it a handful or a basket of losers that we see the market cap being swallowed up into this, you know, new player in the field. So, you know, theoretically that produces, you know, a bit of a melting ice cube. And when these precipitous drops in quo price, you know, do happen in the market prices in the forward booking valuation, you know, frequently it happens very quickly.
Starting point is 00:38:14 So, you know, you have to be in position and that's what we want to do. So that's kind of the high level strategy when we talk about more of the past year or so and what we've experienced. And, you know, last March, you know, we, we took off a decent amount of risk in our, in our book and, you know, simultaneously increase, you know, our short exposure, you know, as we followed the pandemic, you know, from Asia to Europe. And it's ultimately its global destination. And, you know, for us, it allowed us to have a successful March. You know, we ended up paying for that hedge in April and May. But we were comfortable because, you know, to some degree and I think anyone would be lying if they knew perfectly well what was going to happen. So if you're driving a car and you can only see X feet in front of you, you have to act accordingly.
Starting point is 00:39:09 So when we basically saw the really high level of support that the Fed was going to get and the fact that there was pretty tremendous single name risk in individual short positions, we spread out our names names, you know, far more than we typically have, and we typically have small short positions anyways, just due to the nature of the trade. So for, and the other thing, too, is that there is no way to get familiarity in those names overnight. You know, you have to study them for years and years, know, their respective weaknesses. And, you know, we had an article on American Airlines in 2016 or 17 or something like that, you know, buying back their shares fresh out of bankruptcy and putting themselves in a vulnerable position
Starting point is 00:39:59 and any sort of adverse economic effect. Yeah, so for us, we see it as two sides of a trade and that we'd like to profit on both. But I'd be lying if I'd say that the past year hasn't been hard to generate really significant profits on that. But help me to understand, if you have identified the winners, and this winners could up go 10.
Starting point is 00:40:25 fold why the effort of shorting because the short is the return you can get is limited and you always have to find new shorts yep yeah obviously the uh the return profile is asymmetric right so you can lose unlimited and you can only make 100 which you'll never make anyways um again for us it's it's nice to have that hedge um in in times of chaos it's it's a comfort to you know our partners in us that, you know, we can limit the damage or at least attempt to limit the damage. And again, you know, with all the work we do and everything we put in, you know, we're trying to generate the best absolute return that we can get. And if we think that we can pick up, you know, some some more returns from that portion of the
Starting point is 00:41:19 book, while at the same time maintaining, you know, some sort of a basic hedge, you know, we think it's an attractive proposition maybe let's take a look at your portfolio here we go it's this is the part that is publicly publicly disclosed and just like from the upper level looking on the portfolio when i try to read worse engineer this what are the principles beside what we already have discussed the flow and the thinking of your portfolio position sizing um yeah what are these principles yeah so i mean generally speaking on the on the long side you know we'll own anywhere between five and 15 names you know we're historically um you know pretty comfortable as long as the the opportunity merits it to be pretty heavily concentrated in a single name or
Starting point is 00:42:18 two, you know, potentially up to, you know, 25 to 40 percent, you know, that's a pretty rare occasion and I think we'll only have a few of those over the lifetime of our strategies. On the short side, you know, as Dan pointed out, we're certainly going to be more heavily diversified. I don't think those public disclosures really do our portfolio justice because I think there's just some inaccuracies embedded within the 13F filings. And so, but across the short book, you know, we'll have anywhere from 50 to 85 names, roughly speaking. And we like to be, you know, we like to be concentrated in what we believe to be the most disruptive business models in the world. You know, over a longer time horizon, we believe that this is the best way to
Starting point is 00:43:04 compound wealth on an absolute basis for our partners. You know, certainly, you know, I think in the more traditional academic view is, you know, this will increase the vice. volatility of your strategies and therefore increase risk. Our perspective is that headline risk and price risk are just fundamentally not the same as business risk. And so what we want to do is just truly own these companies for the long term. It requires an immense amount of conviction. It definitely requires patience, perhaps a bit of a contrarian mindset and a focus on valuation.
Starting point is 00:43:43 But ultimately, we believe that, you know, sort of in this, especially in this sort of environment in which there's a lot of change happening quickly, that is the best risk-adjusted way to deliver returns for our partners, is to be pretty select in what we own. And we're able to withstand the sort of, you know, monthly, quarterly, even yearly volatility in pursuit of these, you know, truly absolute long-term gains for our partners. You know, it'd be lying. If I'd say, we, it's not a challenge. Obviously, this is the artist game in the world. It certainly is. And certainly to kind of when you see, you know, a deviation in the price on a, you know, on a big position, a drawdown, which aren't bound to happen.
Starting point is 00:44:26 It, you know, it forces you to really stay really focused on what the competition is saying, what the sort of contrarian thesis is, what's driving the price action. And then obviously, you know, we're always looking for and spending years developing conviction on the next disruptive opportunity. So we don't get to, you know, a 40 or 25% position overnight. It takes years of research and understanding of these business models to really build up to that position size. Yeah. And I totally agree. And just to kind of like go back to what we've been talking about previously in valuation and how these things change over the life cycle of the specific investments that we look into, you know, we have respect for our competitors in the space.
Starting point is 00:45:12 me with respect for people on the contrary side of the trade, ultimately as these businesses mature, they become relatively easier to value. So that is, in many ways, that closes the delta between, you know, what we believe is the intrinsic value in the trade at quote price. So if we're converging on, you know, full valuation, obviously the sizing of the position. position isn't as attractive as it once was right because there's there's only so much room for it to grow so you know it's for us it's opportunity and its life cycle of these kind of disrupted verticals and you know one of the you know relatively nice things in our strategy is that you know while we do kind of specifically focus on five
Starting point is 00:46:02 verticals everything we do is on a multi-year basis and they're at different life cycles of their progress and in terms of opportunity as well you know we think that these disruptive events will ultimately tap on basically every component of the modern, you know, global economy. So if the markets weren't efficient, then that wouldn't work out over an extended period of time. So a lot of it comes down to opportunity and in development of the transition from, you know, one business model or one economic model to a newer economic model. in the snapshot we saw a certain activity in the disclosed information like there were in only two positions where there was no chance change visible in the positions like what leads to this activity and what makes you for instance sell yeah so i think one of the things i mean i'll get into that in a second but you know what we like to do is really i think philosophically let winners run i think that what we see happen pretty often and you know certainly something that arnie is really focused on is is is
Starting point is 00:47:12 letting these these companies run to ultimately you know as dan alluded to what we view as their as their fair value which which can take really a period of years and i think that there's a lot of temptation to sell certainly if you know we see a quick pop but we stay focused on sort of the long-term valuation as far as you know when we do sell it's a variety of metrics you know sometimes it's as simple is, you know, it could be going, well, it could be sort of a tail risk event like March 2020 when we just want to take risk off the table. It could also be just a function of a new opportunity or an existing opportunity in the portfolio that we want to augment. So we will transfer from one position to the next, given the opportunity set of the valuation. So, you know, that's
Starting point is 00:47:55 another. And I think really it is a focus on just deploying capital effectively into, you know, these companies where we're meeting kind of where we want to be where they can hit certain valuation frameworks and sort of goalposts that we're tracking. And also as we develop conviction in these positions, we want to add to them over time. So that also forces some selling from lower conviction or lower opportunity type of positions that have reached more of a fair value. But maybe Dan, I don't know if you have any thoughts there that you wanted to add on. Yeah, nothing crazy. I mean, there was no like fundamental investment DC changes kind of optimization and you know from our perspective and really you know Arnie's hyper you know life's work focus is to put out the best
Starting point is 00:48:46 portfolio possible so we don't use a crazy amount of leverage or anything like that so there's some kind of tweaking around the margins that we'll do because we never want to think of ourselves as satisfied and or you know happy with what we did in the past because the past is is gone so all we're good for now is what we can do going forward and um you know so kind of little tweaks and things like that which may not seem you know completely material um you know first we think if we can pick up any sort of returns you know that's great and then you know we also think it's you know an attractive mindset to to always try to put out you know the best thing that you possibly can and you know even if that's focusing on you know the third decimal
Starting point is 00:49:32 point of a short or something like that um obviously without being spending too much time but it's it's kind of a mindset um so yeah but you already mentioned yeah nothing um you know we didn't you know fire up the computer and you know turn one of our longs into a short or anything like that you already mentioned the digging you do before you invest in that might take years and maybe you can explain a bit of the digging you did for your biggest position for Tesla and can me can walk me through the process of falling in love with the big position in Tesla yeah sure so I think one way Arnie likes to kind of talk about just this process of digging and observation is Jane Goodall
Starting point is 00:50:29 sort of famously just observes the chimpanzees, right? Just sits on the hillside and just watches. And I think that's our approach to a lot of industry observation for a period of years. We don't take an opinion. We don't really try to have a strong perspective on something. We just watch as objectively as possible. I think when it comes to a big position like Tesla or Amazon
Starting point is 00:50:52 before it, which was another, you know, is a current position, had been a much larger position, towards the inception of the strategy, what we saw with Tesla and continue to see is a massive opportunity to completely reorganize the wealth pie across transportation and energy. And we think that historically, the sort of analysis that we've seen on the company,
Starting point is 00:51:19 I mean, you can kind of go back all the way 2012-13, analysts were kind of talking about the company as they are today, just fundamentally, I think, misunderstanding a lot of the key aspects of this. It's a really tricky valuation. It's a really tricky company to truly understand. And it takes years to kind of develop a thesis around it. Anyone who comes to this company overnight just looks at it is likely not going to understand it. So in terms of the actual, you know, some of fundamental research that we do, we do everything possible. So Dan and I have taken, you know, visits out to battery factories. You know, we speak to auto dealers. We go to the industry auto shows. We go down, you know, Dan
Starting point is 00:51:59 thankfully has a good science background. We drill down into the chemistry of the actual cells and understanding how these battery packs work, what gives Tesla an advantage there. So from our perspective, you know, the work is really never done. There is, you know, this is like the ultimate puzzle to figure out of how the next 10 years of transportation is going to be reorganized in a new electric first, you know, paradigm. And so from our perspective, Tesla is maybe one of the most misunderstood companies out there. That gives us, that gives us, you know, definitely an opportunity to take a sizable position on a really misunderstood company. And, you know, as far as the sort of level of research that we go into the competitors, you know,
Starting point is 00:52:47 specifically to Tesla as well as the analysis, we vacuum it up constantly. So perhaps, I think what Arne would say is, like in chess or in poker, you know, you know your hand, you know the pieces that you're playing with. But what's potentially even more important is to know what your opponents are thinking and to develop a thesis based on maybe some flaws
Starting point is 00:53:10 in their analysis to gain an edge or conviction there. So a lot of our time is spent really just going through the contrarian theses, understanding why people are maybe bearish on a position like that, why people may be short like it. And though we may disagree, we certainly have respect for anyone that puts up capital, you know, to express their view. It takes years to develop a conviction in a company like Tesla, just as it did, you know, the company like Amazon and Netflix and some of these, you know, in the moment, pretty
Starting point is 00:53:39 contrarian type of positions. Yeah. And we certainly didn't do it for our health. And, but yeah, you know, one of the things is, there are certain things that are, you know, demonstrably facts, right? You know, so when we look at, you know, Prismatic versus Cell versus Pouch, different batteries, you know, even when we look at, you know, who's investing down the supply chain, who's investing in battery factories, you know, three or four years ago, what these, you know, who's just making PowerPoints, you know, you know, we went to the LA Auto show. you know, you can do simple checks, you know, do their big hyped EV product isn't even there and they don't know when it's coming. And, you know, from us we look downstream, well, you're not purchasing the necessary components to get either make batteries or get batteries.
Starting point is 00:54:34 What is the effect of outsourcing your core competency, you know, if you're a legacy OEM to, you know, an Asian battery supplier? You know, are you nearly a... as, what's your moat that you used to have if, you know, your traditional skill is combustion engine production and then that's being outsourced. You know, a lot of the mistakes that were made were saying that all of these companies could just flip, and it's still being made, could just flip a switch and then, you know, go from one completely different way of doing business to completely, you know, it's very, very difficult and if you saw the growing pains and you know even when we look at all of the
Starting point is 00:55:19 different business lines that you know we think respectively have tremendous opportunity for for creative value growth the the market just oversimplified it so for us it was really focusing on the technology you know and that allowed us to then handle the deluge of information say well okay nine times out of 10 that's not material or that's just a great headline, you know, and because we know the underlying business, we know the underlying technology, and we know who is actually, you know, moving ground and who's actually just making PowerPoints. You know, if you look at, I don't really want to denigrate like people, but it was very surface level. And so for us, that's, that's opportunity. You know,
Starting point is 00:56:12 if a gigantic portion of the market is against you and you see a very tremendous opportunity and so you're able to purchase at you know relatively low prices that's you know kind of all you want as an investor doesn't make it easy it's extraordinarily difficult and you know you have to kind of have a compulsion to really want to generate returns so yeah it's it's slow and you know even when we look at um a lot of the players in the full self-driving or autonomous space you know we feel very we felt comfortable years ago that you know you know vision and radar were we're going to be superior to the lidar and mapping paradigm so it's a lot of things that kind of add up and it allows you to feel i don't know about comfortable but but confident
Starting point is 00:57:03 in your decision-making process what else is still misunderstood in tesla i think um you know From our perspective, what we really like to find in companies is a customer obsession. So if you just look historically at really some of the most successful businesses out there, it really starts with the customer. So we like to see both literally and maybe metaphorically customers lined up around the corner to get the product. And I think what perhaps is maybe most misunderstood is a little bit what Dan is getting at, which is how challenging it is to create a complex management. manufacturing output at scale. So this is something that we look at pretty closely right now,
Starting point is 00:57:48 especially as we see a flood of new entrance into this market of prototypes. Now, prototypes are, you know, they can look really great, especially on a slide deck. And maybe even in a presentation, you bring a, you know, a prototype out on stage and you can maybe drive it around. That's great. There's a lot of enthusiasm right now for prototypes. And that is, I think, where we're going to have a lot of problems in the next few years. So what's really challenging about the auto business is complex manufacturing at scale and having enough of the supplies to actually reach those pretty lofty goals of production. Very few auto manufacturers from our perspective are gearing up for the crunch of supply and manufacturing capability that will enable the type
Starting point is 00:58:35 of output that they are predicting. That goes all the way down into the supply chain. That's required. And so, you know, I think if you're an investor in this space, what, what you really need to focus on is who is best poised to succeed given their capabilities today. That's what you need to ask. And then also ask, what are they doing? If they're not prepared today, what are they actually doing to prepare for that output? And that's not just, I would say, in the hard materials or hard technology, it's the software as well. You know, if you look at some of the competitors, and this isn't necessarily even just, you know, full self-driving or autonomous. Setting that aside, if you look at the type of software platforms that are being utilized
Starting point is 00:59:17 in some of the new electric power train platforms, I would take a real close look because we certainly have. I've tested the competitors and looked at their software platforms and the ability to kind of send over-the-air updates onto those cars. And that is going to be a really difficult transition for. for some of these OEMs. You know, I think broadly speaking, the more sort of misinformation and sort of, you know, marketing statements
Starting point is 00:59:50 from the competitors, frankly, the better. Because as Dan pointed out, we're comfortable with some short-term noise and misinformation as long as we're focused on the business. We're not really too focused on, you know, what an executive would say. Orney has sort of great ideas. about executives. They're gladiators in the Coliseum. They're going to say what they're going to
Starting point is 01:00:14 say to make them sound tough. It's also paired with the only way to develop this conviction is to be open-minded enough to actually test out the competitors and to and to want to believe and to go down that path of analyzing the competitors of the business. And if a competitor to Tesla, if either a new entrant or an existing incumbent comes out with an incredible product that's winning among customers, you know, we want to own the best businesses of these, you know, of this dynamic. And so we're open-minded to some of the new, especially some of the new upstarts that are interesting to us that are actually developing the capabilities to produce the output that are actually having, you know, the hard talks around, okay, we need to actually
Starting point is 01:00:58 build up these manufacturing facilities. Those are more interesting to us. But, you know, It's still, it's a, it's a, you know, it's a minefield. And I think a lot of the companies that are coming to market today with, you know, electric promises. We'll see where they are in the next five, ten years. But it could, it could certainly be a winner-tick most type of dynamic. Just, just given the complex manufacturing and how difficult it is to scale up these businesses. Do you want to add something? Sure. Yeah. No, you know, from our perspective, one of the most important things, software right so you know that leads to the possibility of you know pretty heavy gross profit and you know you know very successful cash flow and when we look at the competitive landscape we're still not overly impressed and then if we look for drivers evaluation going forward again the the energy software component the the battery company component you know
Starting point is 01:02:03 auto bidder, and then the real, you know, potentially greatest step change is the, you know, full self-driving and what that can mean. And then, you know, the market is still, in, at least in our opinion, pretty unsophisticated on the different paths that companies are going on. I agree on that, right? I mean, in terms of when we look at these companies with pretty heavy valuations, you know, we think they have a chance to be at zero in, you know, some short order. You know, we're not looking to get in front of those trains, but it's completely different technologies. And then the difference in data accumulation is it's a flywheel effect that is only going to increase. So again, there's a ton of misunderstood. And we look at, you know,
Starting point is 01:03:01 three or four different business lines that we think can be, you know, quite large. Another great big position of you is Spotify. Where did you get the idea from to invest in Spotify? If any investors are curious to sort of read a longer form piece, we have published something that if it's not available on our website, qualified investors can get in touch, which I think goes into the longer form thesis. But I think what we saw with Spotify, was an early recognition that what Daniel Eck, the founder of Spotify, was building.
Starting point is 01:03:38 His early insight was that just as video is a trillion-dollar opportunity, there's no reason that audio can't be a trillion-dollar opportunity as well. I think when we just take a step back and think about the types of businesses that we're attracted to, we like businesses that are global in scale, that are high growth, that there's opportunities for margin expansion that are platform-based business models and that are really sticky among their customers. So what we saw with Spotify was a company that was able to leverage their access to music, to audio more generally, to a global audience of subscribers that love the platform.
Starting point is 01:04:22 And there's immense growth opportunities within there. I think I'd encourage anyone to listen to the stream-on event from a, a couple of months ago that the company put out that really kind of laid out and articulated the vision of true billion dollar user or sorry billion user uh Spotify ambition which we think is achievable and i think that Spotify is one of those companies with a lot of optionality so companies that we we generally are attracted to are are ones that maybe have multiple business lines of revenue generation. So the traditional sort of music model that that Spotify has leveraged is, you know, developing relationships with, with artists, and then ultimately, you know,
Starting point is 01:05:11 being a music first platform. What the next sort of version of Spotify 2.0, what we view it as becoming is a platform for all audio creation. And so that's everything from podcasts to storytelling. And so it's it's no longer just a music platform. It's a platform for any sort of audio experience, which, as you know very well, is increasingly attractive from an investor perspective, just given, frankly, some of the dynamics that we see on these platforms, the ad rates, the retention, the consumer interest. And ultimately, I'd say, obviously Spotify has some big competitors, you know, Apple, Amazon. but remains to be the largest platform right now. And we think that there's immense opportunity left over the next couple of years.
Starting point is 01:06:04 They're at a bit of a pivot point for the company, but we love the optionality that they have to expand into something much larger than just music. What, like looking out five or 10 years, what options could have been come to real businesses at Spotify? I think, you know, certainly the monetization of these relationships between individual creators and their fans. You know, we've seen business models like Patreon really explode over the last few years as a result of the sort of decentralization. So we are attracted to businesses that enable people to make money.
Starting point is 01:06:46 You know, we have a position in Shopify, which again is a platform-based business. model that enables transactions between essentially buyer and a seller. We see this with Amazon as well. What Spotify can ultimately do is be that platform on which those transactions take place. And that will integrate both direct, likely direct relationships of monetization, but also great advertising opportunities as well down the road to really specifically target specific audiences and enable creators basically to create the content that they want to and monetize it really successfully. Certainly no other company has been able to do that with audio so far. And frankly, Spotify is, from our perspective, the most innovative, successful disruptor in
Starting point is 01:07:35 this arena. And there's immense runway for growth there. Why don't you, or why do you prefer Spotify compared to the label? like universal music or other labels, Warner Music, I think it is. I'm sorry, can you maybe reframe the question a little bit? Why? The music labels. Yeah, the music labels. Like, why do you prefer Spotify compared to the labels?
Starting point is 01:08:06 Hey, Tillman here. I'm sure you're curious about the answer to this question. But this answer is exclusive to the members of my community Good Investing Plus. Good Investing Plus is a place where we help each other to get better as investors day by day. If you are an ambitious, long-term-oriented investor that likes to share, please apply for Good Investing Plus. Just go to Good minusinvesting.net slash plus. You can also find this link in the show notes. I'm waiting for your application.
Starting point is 01:08:42 And without further ado, let's go back to the conversation. To sum our interview up, I want to ask the question, how much this self-disruption is embedded in the DNA of Worm Capital? So I think you mentioned one point that you're a kind of buffer and manga fans, but you're always evolving and you have a certain factor of self-disruption, I think, embedded in your company or? That's a great, yeah, it's a great question. And I think that it's something that, you know, Arnie really preaches pretty religiously is that we can't fall victim to, you know, being disrupted ourselves. And so what that means is, yeah, being open-minded to challenge our own perspective, our own views, and frankly, just to not have opinions about any investment. opinions are are not really helpful in fact you know we we pride ourselves on constantly challenging our conviction and starting each day with a with a fresh piece of paper and I think that
Starting point is 01:09:55 over time you know this sort of highly convicted you know patient approach maybe can you know draw you down the path of being, you know, kind of stuck in your ways. And we need to, we need to constantly fight that to reassess and to challenge our viewpoints and be flexible when we need to be. So yeah, I mean, it's a great question because we do think about that quite often. Yeah. And, you know, Arnie's been at this quite a while. And, you know, from his perspective, if he's not getting a little better every year, it's, it's not worth doing. So we just, you know, number one, and, you know, try to stay humble in all of our opinions and, you know, look to the future. And, you know, even if we have had a little bit of
Starting point is 01:10:46 success, it's, that doesn't mean anything going forward. So just try and get better and, you know, both in our analytical work and our psychological work and in all those kinds of things. And just try and keep moving forward. And because, you know, people, um, Not making mistakes or really, really dramatic mistakes is maybe the key to success. So just try and get a little better all the time. For the end of our interview, is there something you want to add? We haven't covered that's interesting about Worm Capital. Not too much.
Starting point is 01:11:28 No, I thought maybe the only kind of thing I'd like to add is, you know, we're um arnie is is super competitive right and i think uh you have to be really competitive in this business to stay to stay really focused and so um while you know he's not on this call um you know i think he his message would be that he's super excited about the next 10 years and it's just a matter of staying focused staying you know truly competitive and and eager to win and wanting to attack those opportunities that would that we spot so um yeah no he um it's I think I would just add, you know, maybe that, well, we can end it there. We can cut that out.
Starting point is 01:12:09 I don't really have anything else to say there. Do you have something to add? Yeah, maybe. Yeah, no, just that we're, we think it's going to be a really interesting 10 years and that there's a lot of opportunities. And then the converse to that is that we're going to see a lot of change. And, you know, positioning is super, super critical. So, yeah, no, we appreciate.
Starting point is 01:12:33 at the time and thanks thank you very much for coming on and answering this question so openly and laying out your position and your approach thank you very much thank you gentlemen it was pleasure and bye to the audience all right bye bye everyone as in every video also here is the disclaimer you can find a link to the disclaimer below in the show notes the disclaimer says always do your own work what we're doing here is no recommendation and no advice. So please always do your own work. Thank you very much.

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