Good Investing Talks - Why is he heavily invested in Carvana? Investor Clifford Sosin on Carvana

Episode Date: January 25, 2021

Here we are talking with Cliff Sosin (CAS Investment Partners) about his investment in Carvana, shorting and his advice for young investors.

Carvana is your biggest holding. How much... I don't look foolish yet there. I don't give a ton. How much percent of your portfolio is it? Oh goodness, it's grown a lot. You know, we have a rule that I won't buy more of something if it exceeds 25% of the portfolio.

We followed that rule with Carvana. But that doesn't mean we have to sell it. And Carvana's appreciated a fair bit. And so it's come to be nearly 40% of the portfolio. nearly 40% of the portfolio. And so there'd be, you know, I think in a lot of places, a lot of pressure to sell some. But in this case, if I think about what Carvana can be in, you know,

five, ten years and I compare it to the other things we own, it continues to be, you know, head and shoulders, the best amongst them. And so I continue to own, you know, I haven't sold new shares. You know, so as to why I like it. You know, we talked earlier about this idea

that it's the big things, right? Over long periods of time, it's the big things that matter. And, you know, so in the case of Carvada, like, is this a better value proposition for, you know, customers? And the answer is, you know,

definitely, by, like, a wide margin. And then the other question is, is this a business that has real, really good unit economics in delivering that. Is it a more efficient way to operate a car dealership? And the answer is yes, absolutely, buy a wide margin. And then the last question would be, are there barriers to competition here

that will allow you to preserve those economics over time? And the answer is, it seems to be absolutely, this is an immensely difficult business to duplicate and it gets much, much harder in the presence of car It was hard enough to build without Carvana. Now the Carvana is there. It's almost impossible. And so if I'm right about those three things,

Carvana is going to grow up to be a very, very, very, very big company and a very, very, very profitable company. And it's got a great set of people who run it really among the best. And so they have a lot of, it's a long journey from where they are to where I think are going to eventually be, and frankly, at this point, where they need to be, need to be to justify what is a, I mean, a lofty price relative to the current performance of the business.

And so, but I'm reasonably optimistic that they can do quite well. What is great about the management? Well, we talked about this bit, you know, but do you get, when you ask them questions about the business choices they've made, do you get sensible answers? And the answers, you know, definitely, they're super bright, they've thought things through. Oftentimes, and this is, you know, they, I think about businesses a lot. And I get the luxury of sitting back and comparing businesses and thinking about them and spending whole flights, thinking about things. And I don't have someone pestering me about like today's sales meeting or whatever.

So I find that often enough I'll meet with people who run a business and I've had a chance to think and have a perspective on their business that might be a little different. And maybe I've thought about things in a slightly more detailed way and about some aspect of the business, you know, because I'm just not distracted by actually running the business. And at Carvana, that's never the case. I think I've thought about this stuff. I think I have some interesting insight, and they explained me, oh, yes, we thought about that, but did you think about this? And if you factor that in, you know, Cliff, you know,

don't worry, we've got this. And so, you know, they don't actually say that last bit. They say thank you for the insights. It's really clever, but here's the other thought. But so they've thought this through very well. They're very, very bright. You know, when you meet people from Carvana who are in a role, and you know, and you start talking to them,

you realize that this is definitely the most qualified person to do this role of any person I could imagine. And then you start asking the questions, and they give you very sensible answers that reflect a great deal of wisdom and practical, you know, acumen. And frankly, then you just sort of walk around and talk to people, and they're having fun and they're smiling and they're working their butts off. And the term energized is absolutely applicable. And so that's another reason. I mean, what they're doing is hard, and so it's going to require a lot of talent to do it,

and they have that help. You're also shorting a stock. Yes. Before, you might tell us why you're shorting the stock. Why in general shorting? Why not long only? Yeah, well, you know, if you walk past $100 bill, why not pick it up? So, I mean, we short for profit.

To date, shorting has been smaller part of what we've done. We do have one short. It's also proportionally smaller relative to capital than the other positions we have by a lot. But, you know, one way to think about it is if I decide that we're a long-only shop and I'm never going to spend time thinking about shorts and my investors expect that I'm never going to be shorting

and, you know, that's that. I will be very poorly equipped, intellectually, institutionally, et cetera, to make what could be over time really great, highly skewed, like once in a lifetime type shorts. And whereas if I, so imagine the subprime crisis and being able to short subprime bonds going into the subprime crisis. Whereas if I sort of tell myself and tell other people and tell my LPs and whatnot that my plan is to be, you know, is to find things on occasion where, you know, they are really great shorts and they're relatively low-risk shorts, and we expect to make some extra money, and if we could find absolutely the

right shorts, something really bond-like with a really big downside, where there's, you know, very limited upside based on, you know, the best example, being a bond, that we could do a lot of it. Then it opens up, increases the probability that sometime over the next 10 or 20 years, I find some really great short. And it only takes one of those, you know, in a career, to just all the looking. And so that's the idea. So when it comes to shorting, you know, you think to find shorting almost about what we don't do. I don't short dreams. I don't short pyramid schemes. I don't short highly shorted stocks. What I'm really looking for is something that's bond-like and boring and going to get hit by a truck. And those are really hard

to find. And consequently we've done relatively little, but the ones we've done have been reasonably successful. The return on capital is great because it's all incremental. The return on time has been crummy because the positions are small and the dollars ultimately made are small. But again, if you think that, you know, this leads to one great outcome over the next 10 or 20 years, then it's worth it. And how large of your portfolio is short? Yeah. Oh, it's less than 2%.

Okay. So it's small at this point. And by the way, that's not, well, there's a lot of reasons why, first of all, in general, when you're short, right? Like, it's unbounded upside. So large shorts are very perilous on an individual basis if it's stock, bonds can be bigger. The other thing is you really need to size your shorts small relative to the float of a stock because if borrow starts to go hard to get or, you know, whatever, you do need the ability to exit. So, you know, whereas you can own 8, 9, 10% of a company, you really,

short more than a percent or two of the company, at your apparel. And so, you know, for those reasons, I think it's a very good risk-adjust, risk-reward in this particular short, but, you know, they're sort of real practical constraints in terms of sizing. Okay. Let's go back to Carvana. What's your perspective for the company in 10 years? Well, you know, so let me just step back and describe what, you know, what makes Carvana special

is if you think about a dealership, it's basically a discrete unit, and it's got its discrete, you know, unit economics. There's a store, there's salespeople, there's some space, you know, there's a reconditioning area, whatever. And those economics are basically the same for, you know, for all the dealerships. I mean, they vary a bit, but you get the idea. And putting them all together as a group doesn't really get you much. You know, large, the reason the industry is so fragmented is that combining, dealerships just doesn't get you much in the way of economies of scale. And it gets you some dis-economies of scale and that, like, you lose the entrepreneurial

acumen that the local ownership brings. And so what Carvana is, is it's a monolithic, vertically integrated, used car selling system. So whereas a dealership is a series of discrete boxes, each box has done economics, carvana is basically one giant machine that covers the whole U.S. that retails, that buys and reconditions and retails cars for people. And so the economics is just totally different.

And if you think about the trade-offs, what Carvana has is that they have a pooled national inventory versus basically a local inventory, which is the cars in that lot, or if you're searching on like a car car car car car is the cars in that geography. In order to affect that pooled national inventory, what they have is they have IRCs, which are inspection and recondition centers around the country,

And that's where they bring cars that they've purchased to, they then reconditioned them, and they store them there, and they're part of the pooled inventory. They've connected them with a hub-and-spoke logistics system that they can transport cars between the IRCs, and then from the IRC to a local market hub, and then finally, by a single-car hauler to the end customer. The hub-and-spoke, and that's what allows them to pool the inventory. And so if you can look at the two models, Carvana doesn't have the dealers. location cost and it doesn't have the salespeople costs and because of the self-service nature of the web they're able to end and the averaging of

traffic that you get with larger groups there have much lower kind of sales support costs for people who have questions or whatever and they also because the inspection or reconditioning centers are bigger they have economies of scale and inspecting and reconditioning cars to a to a standard so they're more efficient in all those senses. What they give up is they have the added logistics costs of trucking the cars around. However, it turns out that while trucking a car is very expensive if you hire a third-party hauler to do it, the reason for that is that there's very low density between cities of car transport. And so car haulers run at very low occupancies

and have to sort of follow these funny circuitous routes to try to build a reasonably full load. Carvana fixes that problem by collapsing. So if you were to call up, you know, someone to ship a car in the U.S. from Citi A to Citi B, they would usually say it's going to be sort of, we'll pick it up in the next two weeks, we'll get it there sometime, you know, two to three weeks after, and we'll charge you between 75 cents and a dollar a mile. By having a hub and spoke logistics system, Carvana can basically collapse the cost of shipping a car down to roughly what it really costs to ship a car.

if you have a full truck and you're driving a car, it ends up being about 16 cents a mile to move a car a mile, and the cars go 50 miles an hour. And so obviously there's a huge difference between 16 cents a mile and 50 miles an hour and like sometime this month and a dollar a mile. And that's, so the logistics system expenses come down a great deal. And so what you have now is a system where Carvana is just a much, so if you add it all up, the Carvana's operating costs are probably more than $1,500 a lot. than kind of a dealership on a per car sold basis.

And then there's really big other benefits, which is that because they have a pooled national inventory, they can offer a radically better selection. Carvana has almost 20,000 cars in the site right now, and a local dealership will have 150 cars in the lot. And even all the cars in an area will typically average about 15,000. So Carvana already has more cars

than the average market has in all the dealerships in the market. market. Obviously, as Carvana grows, their selection is going to continue to expand, and that will make the offer ever more advantage, you know, versus competitors. Also, you know, in order to maximize revenue dealerships have to have to haggle up price, there's this long miserable selling process. Carvana can get rid of all that. There's a much higher level of convenience in that you can order it for your couch and can be brought to your home. So if you line up the consumer proposition in price selection, service, you know, price selection, service, and convenience, Carvana dominates on all the metrics. And so for all those reasons, I think that,

you know, ultimately, Carbana can become, you know, the dominant way that people buy a used car in the United, in North America. And that's probably not going to happen in 10 years. It's probably take longer than that, but if that, you know, if you're on that path in 10 years, you're going to be a lot for, you know, a heck of a lot more valuable than that debt. And there's a long discussion we can have about the unit economics there, but one of the nice things about the business is that as it gets bigger, it gets more efficient in basically every dimension. And right now it's loss-making because it's too small. But, and that's part of the reason why it's so hard to replicate. But as it gets bigger, the unit economics get very attractive and then even more attractive.

Interesting. The big names of our times are of our bright stocks of our times are the fang stocks. And why didn't you have one of these stocks in your portfolio? Well, there's a couple of answers. I mean, some of them I find hard to think through. some of them I find easy enough to think through but they aren't better than the things I've owned and frankly others I probably just haven't spent enough time thinking about them so you know that that's sort of the simple answer but you know

yeah it's really a company by company analysis as to as to you know what I think about each one and why I would like it more or less than another and my little expertise on them varies quite a bit Were you invested in one of them in a couple of years for some time? No. No, the one, you know, if you'd asked me, over the years, I haven't spent much time recently, I don't even know where it trades now, but if you'd asked me five years ago, which of those would you buy?

My answer probably would have been Google or Amazon, just because, you know, they made the most sense to me. But if you asked why I didn't own them, it would have been, I would have said it was because I thought I only had. things that were better. And in retrospect, we did. So it was a, as well as those companies have done, and I remember thinking they were good businesses at good prices, but as well as they've done, you know, we've done, we've managed to do a little better. So it was a good, good choice. Okay. And for Kavana, the next 10 years, do you see the chance that there's a clever acquisition

like Google Bitruth on YouTube? YouTube? A clever acquisition? Yeah. No, I mean, if there's anything as possible. You know, look, the car business, if you think about where they are in 10 years, I mean, you know, in the more distant future, what, so there's 40 million used cars bought and sold in the United States every year. Roughly 25, it's a little more than 25 million, are less than the younger half, less than 10, less than 8, less than 9, 8 years. It depends where you draw the the line. And those are really the cars that Carvana is going after. And if you look at 10 or 15 years it's roughly a market that sort of grows think about it growing you know slower than GDP maybe faster than population and if you add

Canada and you look out 15 years it's probably I don't know roughly 33 million cars if you then assume the question is what percentage of cars will carbonic get. And if you make up the assumption that they get a third, then that would be 11 million cars. There's no reason, in particular to anger do a third, but if you look at a lot of other industries where online has made a lot of inroads, it's not inconceivable that it could be a third. I've joked with people that, you know, if you were to have a neighbor and you were talking to your neighbor and your neighbor said, what do you do this weekend? Oh, my plan's to go to like five different car dealerships and, like, test drive cars and look at them.

You know, if Carvana was of that size, you'd say, what are you crazy? Like, you're going to pay more, you're going to have a worse selection, you're going to have worse experience. Like, why not here? Let me show you on your phone. Like, I can get you exactly the car you want right now. And so I find, you know, I sort of wonder why I'm stopping at a third. But a third seems like a lot. So we'll stop there for now.

The next thing that happens is people buy and sell cars about every six years. And one thing that's really interesting about Carvana is, that if you make buying and selling a car easy, you allow people to get the car they want as opposed to the car that's available. If you take a lot of the hassle out of it, you make it even fun, you lower the actual cost because Carvana offers a discount of changing cars. People should do it more. And the exact amount more they'll do it is difficult to know, but it seems like they should do it a lot more. And the experience in other markets is that they do it a lot more. So if you kind of put those factors together and say that Carvana could

make, to could sell 15 million cars a year in 15 years, then if you do some math about their unit economics or whatever, you get that a company could make $35 billion a year, maybe, maybe more and more like 40, depends on your assumption. And so, you know, 40 times 20 is $800 billion. The company would generate tens of billions, maybe more, between here and there as profit for owners. And so if that were to come to pass, I mean, it would have been to pass. It would be a tremendous investment, so that's why we earn it. How do you see the risk of a disruption on the one side through electro-mobility? So you have fewer parts, your cars can run longer,

and the only thing that has to be changed is the wheels. In some cases, on the autonomous driving, so you have the chance that you can use your car more often and that it doesn't stand for like nine of ten hours. 10 hours a day? Yeah, so I've actually spent a lot of time thinking about the idea of transportation as a service, undermining car ownership as a paradigm,

and therefore basically substantially reducing the ultimate available market that I could go after. And it's interesting because, so if you ask people, who are in the space, they will correctly point out that a shared vehicle service will have much higher utilization of the vehicles and that lowers the average cost per mile of vehicle travel because you have lower capital costs and lower depreciation costs per mile. However, what people miss is that meaningfully offsetting that is that a shared vehicle service introduces deadhead miles into the system. And what I mean by that is there's

miles traveled empty between fares. And those deadhead miles don't go away as the service gets more dense. They can reduce as a service gets more dense, but at some point there's a fundamental limit. And the limit is because if you think about how people are set up in this country, there are sort of suburbs or sort of residential areas and there are sort of commercial areas. And the residential areas are net exporters of people in the morning and net importers of people in the evening. And these net flows of people put something of a fundamental limit on the percentage of miles that could be occupied in a shared vehicle fleet. exact measures of what that would be

are hard to come by but if you look at New York City taxis they drive almost half their miles empty actually more than half their miles empty Ubers I've been told drive roughly half their miles empty long haul trucking depending on the company is often as much as like 15%

empty and so a shared system of this nature would likely have a fairly high percentage of its miles empty, you know, if you think it's a third, effectively that means you have to drive 1.5 miles for every one mile of occupied travel. And what that does is, you know, a car sitting idle is gathering costs because a depreciation in capital, but a car driving is really gathering costs because, you know, even if it's in a very efficient energy electric vehicle, you're still, you know, using tires, you are still consuming energy.

energy, you have some degree of hazard from accidents, and even if people have got self-driving systems, animals will still drop in front of it, etc. And so when I have tried to work through what the fixed and variable costs of an electric vehicle would be in an owned paradigm, so I own self-driving electric vehicle, versus in a shared paradigm, so I participate in a self-driving vehicle fleet, I tend to work, I've worked out that the savings for, if you compare buying a car and owning it for its whole life versus sharing a fleet, participating in a shared fleet over its whole life, I've worked out that the savings are modest or frankly probably negative. In other words, you probably could spend more if you're an average American using

the shared vehicle fleet than you would owning your own vehicle. Now that, that's a interesting starting point because it means that like for the average person there wouldn't be much in the way of savings to switch if any to switch to to give up their car. The next thing to think about is that's a bit of a false comparison because if you look at what people actually spend per mile of car of travel many people have many different cars. And so comparing the average car owned over its whole life to kind of a shared vehicle fleet misses the point. If someone is very cost conscious, they can already own a car that has almost no capital cost. They can buy a nine-year-old Toyota Corolla and, you know, pay

a few thousand bucks and have a car where the depreciation and capital cost per mile are very, very low. And so for a cost-conscious person, there's no way, like buying a used car or older used car, there's no way that a shared vehicle service would be a more efficient way of travel unless they drive very little and live in a fairly dense area. On the flip side, for somebody who's buying an expensive new car, the cost savings of using a shared service would be substantial, but that person has already given a revealed preference for a willingness to spend a favorite more for a different experience. So, you know, a person who buys a BMW, you know, 7 series and is incurring, I don't know what the number is, like a dollar a mile of cost to travel, you know, $2 a mile of cost to travel, you know, the fact that there's a 20 cents a mile option out there in kind of the old Toyota Carolla probably isn't particularly relevant.

And now, you know, in the fact that there's a 50-cent option if you bought, you know, a median car isn't particularly relevant. And the fact that now suddenly there's going to be a 45-cent shared option doesn't strike me as particularly relevant. And so my sense would be that those factors would mean that just if you do the individual comparisons by consumer, it makes the market look a lot smaller than you might think. Ownership still seems to win in a lot of cases. If you then go, there's another argument too, which is that a shared vehicle fleet is in many ways importantly, experientially, hedonically disadvantaged versus an owned fleet. You know, the simple, for example, you need to add wait times into effect.

And the average trip in the United States is something like 10 miles and 20 minutes, if I recall. And so even adding, you know, just a couple minutes of wait time, you know, let's say the savings are going to be 5 cents a mile, 10 cents a mile to use the shared system. And so we're talking about saving, you know, 50 cents on a typical journey. Well, you know, giving up three minutes of your time to save 50 cents works out to be a pretty crumbingly wage. Moreover, in a shared system, when people have built models about how wait times should evolve, you have variability in wait times. There are peak times and there are non-peak times and there are distributions of wait times depending on the actual ride. And so it's probably necessary to think about, you know, from the way consumers would probably think about it is they

probably would think about the peak, you know, sort of the bad day experience at peak times. And so when you think about it that way, weight times, the average wait time is probably understates the cost that consumers would incur. Because if you know that sometimes it takes 10 minutes to get a car, then now you need to plan, you know, get a car, call a car earlier, even though on average it only takes three. And if you value your time, it kind of creates this dead time. The other thing is, you know, there is a great deal of variation in the vehicles that people choose to own, you know, pickup trucks and minivans and big cars and small cars. And shared vehicle fleet have a lot of really great economics. We'd have to have really homogeneous

vehicles. And so people wouldn't be able to match with the vehicle they want. They also, you know, these vehicles will be shared by a lot of people. So it's public space. You're not going, it's going to be dirty. You have to factor in cleaning costs into it. But even if you ignore cleaning cost, the person before you chewed gum and left it there, and now it's gross. You know, so there'll be reasons why people wouldn't want to do that. Also, there's enormous convenience factors, like leaving your gym bag in your car for your workout after work, or running multiple errands and having your stuff in the car between, having your kid's car seat installed, leaving your sunglasses, you know, this, that, and the other.

And frankly, those reasons probably get much more important in a self-driving vehicle context, because now this is essentially a room, you know, that you occupy while you travel from point to point. And so it becomes more of a probably intimate personal space than it would be, you know, for a car where you're kind of occupied driving. So those are all reasons why people, I think, would be willing to pay a premium to have their own vehicle. And I've already sort of talked about how, you know, it would probably be, you know, cheaper. Another couple factors to consider, you know, there would be meaningful transition costs to move from owned vehicles to shared. In other words, for people who already own a vehicle, switching to a shared fleet service would

be costly, and so that would, you know, even if it were a better equilibrium, you could think about there as being meaningful transition costs, and so it would have to be sufficiently better to cause people to incur the transition costs to make the adjustment. You know, there are markets right now. I mean, if you look at India, labor is very cheap, and so one could argue that economically, cars are already self-driving, but you don't see mass participation in shared vehicle services, but you see are individuals who have their own car and driver. And so, you know, the other thing is, lastly, if you combine all those things,

the self-driving vehicle market in that model gets smaller and smaller and smaller. I keep cutting pieces away. And that reduces the quality, you know, these things are much better and much higher densities. And so as I reduce the number of vehicles in the shared fleet model of the world, I would in turn presumably reduce the quality of the shared service, which would have a knockout effect of lowering the use of it. You know, if you look at other markets, be it second homes or RVs or boats, you know, there is a pretty clear revealed preference amongst people

to own things versus to share them. And so, you know, when I put all that together, you know, I think it is, you know, to the extent this technology gets developed and rolled out, et cetera, et cetera, there is a niche that it will occupy and it will be a nice part of the transportation system and it's a great way to have a third car as opposed to, you know, to go with two cars as opposed to three in the family,

or one car is supposed to two, or for people who drive infrequently or short distances. Or, like, there's a lot of people who are too, you know, there's a lot of use cases. But as the mainstay sort of way that people travel, you know, to and from the places that they go every day, my impression is that car ownership is a better economic model kind of for society at large, and that it would win over time. Obviously, if I, and that even if I'm wrong, heterogeneity across density by the market and consumers, and different places and people and incomes and all the rest should mean that we're talking

about pieces of the industry, not the whole thing. And so when I put it all together, I come away thinking that this isn't a threat that I need to worry much about over time. One last fun fact is that outside of major cities in the U.S., if you survey people and ask why they used Uber, the answer you get, which accounts for like 90% of uses or some very high percentage,

is parking and drinking. Right? It makes sense. I'm going to dinner. I'm going to have some drinks. I don't want to drive or I'm going somewhere I don't want to park. If you have a self-driving vehicle, parking and drinking aren't a problem anymore because your car can park itself and come when you call it and drinking, and drinking, so one might ask the question, would the self-driving business be bigger or smaller if there were self-driving ownership, self-driving vehicles that you could own. Because you could make a case that the shared vehicle like Uber, if so many of the use cases are for drinking and parking, if I got rid of those use cases and everyone had a self-driving car, yes, the cost for Uber would go down, but so would kind of the benefits. So, anyway, that's my sense. Obviously, if I'm wildly wrong, and that then Carvano is going to be worth us, then I think. Maybe do you have any advice for young investors?

I mean, yourself, not very old, obviously. Older by the day. But any advice for young investors or students who are watching? yeah don't do this right i mean like come on uh this is what a waste of resources you're bright like go you know go find a way to build a business to like make the world there i mean you know there is a role for people to sort of sit around and allocate capital of a sort of high level in the marketplace but but the way we've set up our society there's um the people because of the

people are built like the amount of intent of while there's a certain amount of real capital allocation that happens there's a whole lot of just playing old gambling that happens and um there's really we've i don't know we could have 100 people with much larger funds who could do these allocations and be basically as accurate as the i don't know millions of people we have getting paid gazillions of dollars to do it so it's a really overstaffed industry and and so if you want to make the world a better place i mean you know and have a really rewarding existence um the right thing it to do is to go, you know, go do something else. You know, make the world better by running a, you know, a lumber yard better than the other guy. And, you know, if you're great at running

a lumber yard in Arkansas, you know, eventually you'll be profitable and then you can, you know, get another lumber yard. And every time you add a lumber yard to your domain, you're going to make it more efficient and people who buy lumber are going to get a better quality and price and your employees are going to be happy. And, you know, you're going to make money and, you know, serve society by providing a vital product in a better way. And it's just, you know, we're innovator. You know, there's lots of good things to do. Investing isn't necessarily particularly good for the world.

It also isn't natural for most people. People derive an enormous amount of satisfaction from flow states, from continuous improvement, from getting feedback for the work they do every day, from being part of like an energized team, like tackling a project together and getting to win, like all at once. Investing doesn't have a lot of that, right? So, you know, you make a decision, you think about Carvana for a while, and then you make your bet, and then, like, it goes up, it goes down, it goes down, it goes up, it goes up, it goes

five years later, yes, you've made a lot of money, but, you know, the whole process felt nothing like, you know, building a chain of coffee shops, right, where, like, you have an opening and the sales go up, and you're very happy, and you hire a great employee, and you're happy, and, you know, you've got all these little wins along the way, whereas, like, owning a stock is just that's just not what it is experientially and the process of sitting around and thinking all day and reading and talking to people

I mean it's just not what people are built to do which is why I can exist because I happen to be built more to do it than most people but on average people will find much greater satisfaction in more real businesses I think they just find more human satisfaction

in doing it and they also probably serve society better and so and frankly given that on average most investors do poorly, they'll probably do better. So, you know, why not, like, pursue that? And if you really must come my way, you know, it's really hard to get into the business that I'm in. Most institutions aren't set up to do it. There's a lot of reasons why they're not, but basically it has to do with the principal agent problem between investors and allocators. And so if you want to practice true long-term, you know, investing, like I do, Ultimately, you're going to have to start your own job.

I mean, there's just not a lot of places to do it. And it's a long process. It's taken a very long time to build this. And so there's no, there's no King's Road to Geometry. Okay. Thank you very much for this great insights. Thank you. Thanks for your time.

Thank you.