Yet Another Value Podcast - Chris DeMuth's State of the Markets June 2024

Episode Date: July 3, 2024

It's time to welcome back Chris DeMuth for his monthly state of the markets. For this June 2024 edition, Chris shares his thoughts on: election and election trades, $LQDA, Russell Rebalance arbitrage, Burford $BUR / Security National $SNFCA, Presidential Debate and implications for investing. For more information about Rangeley Capital, please visit: http://www.rangeleycapital.com/ Chapters: [0:00] Introduction + Episode sponsor: Fundamental Edge [1:51] What's on Chris' mind for June 2024: election and election trades [3:24] $LQDA [12:07] The Russell Rebalance arbitrage [18:58] Russell Rebalance cont'd: Burford $BUR / Security National $SNFCA [24:20] Thoughts on Presidential Debate, election and implications for investing Today's episode is sponsored by: Fundamental Edge One of a kind, world-class training created for your team, your culture, your way. Fundamental Edge was founded with a mission to train the next generation of investors and a vision to create a platform that serves the learning and development needs of investment professionals throughout their careers. Through structured lessons and proven frameworks, Fundamental Edge aims to condense years of “learning via osmosis” into a masterclass for the equity research process. Funds looking to strengthen their internal training programs can visit fundamentedge.com/corporate-training to learn more.

When it comes to attracting and retaining talent, the number one tool is a robust training and development program, but with portfolio managers and senior analysts balancing earnings calls, management meetings, and M&A announcements, how will there be enough time or energy left to train new hires? The Fundamental Edge team has been there before as struggling new analysts and as experienced investors managing hectic schedules. They also know that it's critical to develop your team the right way, your way. Now they've transformed their Analyst Academy curriculum into an enterprise-grade tool that it's facilitating funds onboarding and continuing professional development. Analyst Academy Pro is a hybrid program combining self-paced learning modules and interactive

Q&A, coaching, and dedicated subject matter intensives. The team will tailor a program to your firm's specific needs. With access to a growing group of partners, there's no topic in fundamental investing that Fundamental Edge can't develop for your team. To learn more, visit the Fundamental Edge corporate training website or email them at info at fundamental edge.com. That's info at fundamentedge.com. All right. Hello and welcome to the yet another value podcast. I'm your host, Andrew Walker. If you like this podcast, we'd mean a lot if you could rate, subscribe, review wherever you're watching and listening to it. With me today, I'm happy to

back from an ultramarathon on an island for his monthly June state of the markets. My friend and the founder, Rangie Capital, Chris, how's it going? It's great. It's great to be home. great to be back at work. It's great to have you back. Let me just get started. A quick disclaimer. I start every podcast reminding everyone that nothing on this podcast investing advice. That's always true, but particularly true today because Chris and I were just

goofing around for 15 minutes before this. I don't even know what we're going to talk about today. So just remember, we might just be talking about a bunch of different stuff, talking, you know, through our bots, who knows, but please consults financial advisor. None of this is financial advice. Chris, it is the end of June. think the exact date, if I pull up my calendar, is June 28th, June 28th, 2024, the afternoon. What is on your mind as we kind of start up the summer and wrap

into July? Well, I don't travel a huge amount, but having come back from travel, I've had kind of a day to check in with a bunch of management teams that both caught me up on how they're doing as individual companies, but I kind of tried to pick a lineup of kind of CEO and CFOs of companies that were sort of indicative or thematic of things that I'm thinking about. So I touch-based with people on the topic of Citgo and Venezuela. I touched base with people on the topic of the ESEP banks on the topic of liquidity and their various regulatory legal route to the market. And I thought a little bit, about the election and election trade. So those are kind of what I have, just 24 hours of work

where I have been mostly focused. There were kind of a couple other, you know, banks and other kind of portfolio positions that I kind of checked in on, but they were so corroborative that nothing had to change that much in one week in June. So those were those are the ones that were kind of a most of interest kind of on my mind where I wanted to kind of dive back in. Well, let's let's dive into a few those. So I guess one of them you mentioned Liquidia, which long-time listeners will remember Lionel Hutz came

on and talked about Liquidia a long time ago in, you know, rough overview in December or maybe it was early January. I think it was late December. They won against UCHR, basically said, hey, your product can go on the market, and now you know, it is the end of June

and the product is not on the market. UCHR has thrown, they've sued the FDA. They have thrown a bunch of spaghetti at the wall, and as Lionel would always remind me. And as probably you to HR would remind you if you've got truth here. I'm like, hey, even if the point is only delay, every month of delay is worth tens of millions and extra revenue where we're exclusive. But I do think like, I think you and I both like end of one situations. And this whole situation even before the six months delay was always

end of one. But I think it's increasingly end of one because people can look at liquidity stock price over the last six weeks, two months, whatever you want to call it. People are starting to look at each other. I know I emailed you two days ago, and people said, look at each other and be like, hey, are we missing something here? Like, it's, it's been a while. And it seems like the FDA could have proved this any day. Like, what is going on here? So I threw a lot there. I'll just kind of turn it over to you. I am long the stock, but I haven't, we haven't really been kind of trading it actively in a while. It's a significant idea position for us. And I, love it with the caveat that it's super binary, right? It could be a spectacular disaster or

success. I think it will be the latter. I continue to think that. And trying to kind of steer how much I analyze silence, how much we kind of the proverbial Sherlock Holmes kind of dog that didn't bark. Is that a huge deal? Is that nothing? Is that trying to steer, analyzing it properly and soberly and soundly and not reflexively understating it, because I'm just working and thinking about something else, sometimes a lack of news can kind of just slip through, and every day you just go by, but you can also overstate. You can also come up with an incredibly specific theories for why nothing happened. And so trying to be appropriate and sober and careful about something that I do not know what will happen, but I do know quite a few things. I can dispense with fairly

quickly, the citizens petition, there's a lot of kind of ancillary stuff that UTHR is trying to do that I think has very, very, very low odds and unlikely to affect the overall situation with FDA approval and getting to market. I thought that in theory, I think that in practice, so it's kind of on judgment and information that that's not going to be a problem. The FDA itself, something complex here is this is kind of a multi-party embedded game where the FDA is very, very unhappy with the judges demand that, they, before a final decision, without revealing that decision, admit when they're going to make a decision. There's huge problems with that, precedentially, for the regulator. And while I tend to be

very unsympathetic for a lot of things the FDA cares about, I'm very sympathetic for this. It creates a number of catch-22s. If this precedent goes on the books in a common law system, this judge demands it. Judges will demand it all the time. There's a problem with their statutory guidance that if they know what a decision is, they have to be able to inform the parties. So if you, the catch-22 is then like, it raises the standard during those three days. The parties could go after the FDA. You said you know what it's going to be. Well, what is it now and why can't we get to the market?

If you don't know, you could say, well, we haven't decided yet. We haven't done everything. So there's all of these problems the judge created for the FDA. The FDA is extremely unhappy with the judge, that requirement. And so that has come into play here in a way. that wasn't intended to hurt liquidity, but it has so far. Now, it is approvable, the drug, both indications the drug is provable. It has not yet been approved. It also not yet been rejected. Something I can say categorically, the FDA has not requested new information or implied that they

would or might or anything negative that they're going towards. There's been a lack of specificity about an approval date or an approval, but you could say, well, the FDA's had a lot of time to approve it by now, and they haven't yet. I mean, that's undeniable. But they also haven't rejected it yet. They have not asked for a resubmission yet. So they've had a lot of time after Liquidia and the FDA had tons of backs and forth to raise a red flag, and they have not. So I think the FDA will approve it. I think it's going to get to market. I think so fairly soon.

But fire me for that judgment call. I thought they could have done it by March. Now, how many things at the FDA take a quarter or two longer than I think they should or would or could all the time? I mean, the FDA doesn't ever act faster than they could. They don't care. The FDA has no balance between false negatives and false positives. they're happy to take all the time in the world.

That continues to be a problem, but it's not necessarily a rich vein of conspiracy theories. No, look, I certainly hear you. Again, the unique thing here, you laid out, well, all of this is very much n of one. Like, I don't know. When I was talking to patent people about this, like when we were really in the weeds,

when the original case was on, they were like, oh, this is such a unique case. And like, as we've gone and while we're sitting here with UTHR suing the regulator and the FDA approval, like, it is true. truly n of one, but because of that, like, I feel like I'm brushed up against the absolute limits of what I understand. And I keep coming back to exactly what you said. Like, there's been no request for resubmission, but at the same time, the FDA could have approved

this months ago. And on top of that, you know, I am with you. Like, the FDA has no regular, they don't really see the opportunity costs of three months, except, you know, there are patients who are getting denied a superior treatment option because the FDA is dragging its feet because I don't know if it's bureaucracy, because they're mad at the judge, whatever, but it is a little bit infuriating to me. And I don't say that just as an investor. I say that like if I had somebody who needed this treatment and the treatment continues to get denied and, you know, like three months of delay, even if you say, oh, it's only three months now, like it's adoption. And yeah, I just think it's actually, we're talking about horrific health

problems. I mean, when I've read, oh, man, when I was researching this, it is like the reason liquidity's drug is superior is because, in part, taking the UTHR's drug, you have to inhale it, I think it's six times, if I'm remembering the number correctly at the top of my head. You have to know it six times. And inhaling six times deeply is difficult for these patients. And like, it only works until they can't inhale anymore. And like the liquidity products, you only have to do once. It's like, it's so terrible.

I come back reading through this in detail. Like, when I go deep in this, like, I'll get to dinner with my family and I'm just like spent thinking about how horrific. this health problem is, like, I never want to have any of the problems that this company treats. It's a nightmare. All the solutions in the market, actually, some of the ones that Liquidity is working on now are much more promising of actually being kind of good. But you're talking about an F health situation that products expensively can get you to D-minus for a little while. But, I mean, even just being able to take a few steps and a few breaths, I mean, we're talking about unbelievable impairment.

I mean, it is, it just crushes my soul reading about it. It's so bad. It's not a particularly famous problem. So it's not kind of like, you know, just a basic like cancer or heart failure that people know a lot about. It's devastating. So the idea of intervening between a doctor and a patient that want to take a horror show and make it slightly better and toying with them because you don't like what the judge

says is evil. But it's one of the many reasons I don't like to look at biotech stocks. Like, A, because I, even though I've got some background with. them. I always feel like I'm completely out of my depth when I talk to somebody who's like got a PhD and actually specializes in this stuff. But B, you read it and like, oh, they're curing cancer and then you hear the horrific cancer stories or they're curing this orphan disease and you hear the hurt and you're like, oh my God, it's just hard to function. Let's move on. I'm not, I'm not that squeamish, but, you know, shots into eyeballs or there was one recently that I hadn't really gotten into that deeply, but it was

like a toenail fungus thing. And I'm like, you know what? I'm just going to study something else for a little while. Like, I just don't need to think about this too much. There used to be a company. I'll say that, sorry, for another day. Let's switch to the other thing. There's two things. What just popped in my head. You know, today you and are talking June 28th. This is the Russell Rebalance Day. And someone told me, I've heard it from a few sources, but someone laid out for me. You know, there's an old trade. The Russell Rebalance happens. And if you're getting kicked out of the Russell, that's hundreds of thousands of shares that are four sellers from indices and all that

sort of stuff. And if you're getting added, that's hundreds of thousands of shares forced buying, basically, right? So there's an old arbitrage thing that, you know, it increasingly, obviously these get gamed up as markets evolve and everything. But basically, you want a longest stock that's getting added into the Russell so you can sell into that forced buying. And you want to short a stock that's getting kicked so that you can buy into that force selling, right? So you do that in tradition that makes alpha. Someone told me today that this has been the, worst performing of that Russell rebalance arbitrage.

It's been the worst performing in history. And I just thought that was kind of interesting. You know, and of one time does not make a sample, but I wonder if the game went too far and the game got reversed or, you know, it's also possible. My understanding is part of the

reason it's been so bad is because one of the companies that you would ostendably short because it's getting deleted has had a huge short squeeze and is up like 200%. So is it just that? I don't know. I just thought it was interesting. I'll toss it over to you. You can talk Russell rebalancing and you can talk any of that. So I love the Russell reconstitution. I've worked on it my entire career. It was extremely easy and lucrative for the first five or 10 years kind of of this century. And then it started getting

hard or I started getting bad at it, but I knew what I've always known. And it used to be almost just a mechanical moneymaker, not only across understanding where the cutoff was going to be, who's going to make it who wasn't. And I was always, of course, most interested in surprises. You didn't need to be that novel. But even the trading, kind of how it works on the limit on closed auction, sometimes you wouldn't even see the trades and you'd be able to short something dollars above where you saw a trade, buy something dollars below. I mean, it was really magic and kind of as much as you're tempting fate to say free money. It really felt like that for year after year after year after year. Then it started getting hard or I started getting bad. And

it got to the point maybe really when we started working together where you had to find a very novel surprise if there was anything that was at all priced in. It felt like at least half the time it felt to me like things were tending to get overly priced in and you could get goofy on both sides of it pretty easily and a lot of things would get kicked out but sort of not that hard to expect and then they would trade up a lot. Something would get in not that hard to expect and it would trade down a lot. My interest in banks and thrifts was kind of helpful because mutualization and demutualization in that process made for some more novel ones because they were quirky, very, very low,

liquidity, low float, higher market cap. There were kind of some interesting ones that the market didn't really do correctly in the sell side. I always look at the sell side banks that put out lists, what are they doing wrong? because you could copy them for 10 years and make a lot of money. But then after like, I don't know, 2010 or so, just very approximately, it got to the point where if they understood something conventionally, that was not a lucrative trade, in fact, a dangerous trade,

and you had to find their mistakes. And so if you found, oh, they mischaracterized something on the margin, you could kind of grab some moneymakers. And now I've really avoided it for the last couple of years, just because I've gotten tired of being wrong about these or not lucrative. Or even when I was right, it wasn't lucrative enough to follow. So I'm very interested in it, but it's really a one-off time where there is actually a mistake in the market cap or something like, oh, I know they got this one wrong, but it's very one-off now. As podcast listeners, you've heard plenty about Fundamental Edge by now.

If you've been holding off on taking their Analyst Academy, now is a great time to check back in. Fundamental Edge has rolled out a refreshed 2.0 curriculum and continues to add more and more content. There are now over 20 guest speakers' recordings with more on the calendar. Recently, Fundamental Edge hosted Rich Falk Wallace of Arcana to discuss factor models and TransUnion Investor Relations VP, Aaron Hoffman, to give the company perspective on analyst meetings. For a 10% discount code to Analyst Academy, visit Fundamentedge.com slash YavP. That's Fundamentedge.com slash YAVP. Yeah, just I do think, as you said, like, it goes, it's one of those things that goes from the hands of

like people who do it by by hand or by eyeballing to it goes to all the sudden it starts getting picked up like quants and then you've got it's just like quants on quant violence and you know increasingly the rebalance happens at the end of June and like by August people are already starting to prepare for the next one and they're starting to shorten stuff so you know I'm with you the ones I've really seen where you'll see like huge moves up or down is where a bank makes a mistake or maybe you know Wednesday May 25th the preliminary everybody knows the preliminaries list coming, and it companies like 4% below the cutoff, and then something puts them 1% above, and then three hours later, everybody realized that and sends the stock up

like 20%. And it becomes both a self-perpetuating cycle, because if you're up 2%, like, you might be on the border, but if you're 20%, you're way over, and people realize, oh, if I jam this up, it's both self-perpetuating and I'll have an index by at the end. So it tends to be the surprises that get priced in. But it is just markets evolve and markets get harder. And it used to be an easy trade. And now, again, I just, I feel like the quants are all over this months and months in advance and they're positioning for it. And unless you've got a real, unless you've got a real edgy thing or something, it's really tough to get included there. I've got the point where if it's a quarter or a fifth or maybe more like a tenth of a thesis,

of something I really want to own anyways, like, oh, maybe this will help too, is kind of as much as, but I wouldn't want to really allocate capital just for this one event, excluding a real reason to want to own something, a real reason to want to short it. And occasionally, if we own something anyways, there'll be some conversation that I'll have with management. Here's a reason to want to qualify for a given index, or even sometimes for a specific thematic index, like, hey, you're just out, you're doing this stuff anyways. We could get into this index that could really help the stock, why don't you do this? And so it's like a gentle activism opportunity and a part of a thesis sometimes, but I've kind of lost my taste for doing it by itself.

I'll just, I was kind of dancing around because I hate to mention specific stocks sometimes. But I'll just throw like the one that's really been top of mind for me is I've been really surprised at Burford and long time listeners will know the Burford story because Arden Fokin has come on here and talked three times about Burford and they've been very in death. But like Burford is straight down and almost a line from the beginning of May, $16 per share to today, $13 per share. And I just keep scratching my head at it because number one, to me, like a lot of Burford's, for those who aren't familiar, Burford has a claim against Argentina. The claim against Argentina, in my mind, has gotten better because Argentina bonds have gone up quite a bit over the past two months and year.

So you would think that side of the story has gotten better. And then B, they are getting added to the Russell. And I don't know the exact number, but it's like literally millions of shares are going to get bought by the Russell. And the stock trades maybe two million shares a day. So I just look at the combination. I'm like, hey, there's good news here. Good to at least neutral news. There's no really bad news.

Maybe Q1 earnings was the beginning of May and people might have had issues with them. But, you know, the stock's 15 to 13 in June. So it's hard to put it on that. But you've had no news to good news. and they're about to have millions and millions of shares above the average volume added at the end of the day today, and the stock's down 10%. And I'm like, how is this going to, like, what am I missing here? How is this going to get added to the index?

Like, where are these shares going to come from? How is this down with this big buying balance? I have no idea, but somebody told me, I trust them. I didn't verify this for myself. But the biggest loser on this ad has been something that's getting deleted that's up like 200%. And the second biggest loser is Burford, which has, again, millions of shares. and the stocks don't know what it is.

I'm honestly quite confused by it. Yeah, yeah. I don't have a good answer to that. I have one kind of, the quirkiest one in the whole year is a stock I really, really like, a great company called Security National, SNFCA, and it is getting kicked out of the, is not making the Russell cut off. its company 3,002 because of misreported treasury stock. They just got the market cap wrong.

It 100% qualifies. And when they try to go back and explain as Russell, Russell's like, you're right. We'll get you back in next year. It's too late for the cutoff that it actually was just muddled. And so it's trading for $1008 a share. What's interesting about it to me is they have a loser of a mortgage business that they're winding down. like they make like a buck a year, maybe a buck 50 a year, if they can orderly cut down their mortgage business.

It's not a super great moneymaker, but they have tons of like undervalued real estate. They have a lot of interesting assets and they're not going to make it, but they probably will next year. And that was a real mistake. I thought there was a chance Russell was going to reverse, but they just didn't have a mechanism for a goofed up share count, a wrong market cap number. should have qualified, but didn't. So that was kind of the most interesting one and the most, like, I'm always looking at

these edge cases. That was kind of the edge case that didn't make it. That would also be an interesting one. Like, if Russell had reverse, it'd be interesting for S&F, but it would also be interesting for the company that was the 3,000th because everyone bought it thinking it got added. And then Russell would come out and be like, oh, actually, we're not adding it. So that would have been an interesting case. I do go ahead.

It's going to have a, I don't know if it will be orderly or not, but, you know, looking at I mean, the better the arbitrage, the better the quants to get at this. I think that it's gotten pretty dang good. It's, there should be like a million shares that have to be sold today by the owners that can't own it or won't own it for the Russell. So, like, that seems like that should beat up the stock brace pretty well. So $7.71 right now, heading into the clothes within, you know, with a hour and a half to go. if it like tanks like that could be kind of interesting on the clothes but you know i don't know i i just but you know like it's so it forget that that company but a company with millions of

shares to be sold like you would think people would know and the stock would adjust at a time right people would either short it or they sell knowing that's coming but i i look at the i look at that chart i don't see anyone prepping for this huge sell order that's coming similar to berford where the stock's straight down when you've got this huge buy order a sudden be coming like i just don't I understand where the shares are going to come from. I understand there's like blocks and computers, but down 10% with, you know, 10% of your company to buy, it's very strange to me. Sometimes on this podcast, I will, most people listen over audio.

And sometimes I'll mention something over YouTube and I'll think about it later and I'll feel bad. I'll be like, oh, most of the listens over audio, great podcasting mentioning something visual. This is going to take this to the next level, Chris, but I just want you to know because we were talking about diet. My wife is absolutely in the kitchen and she is definitely making a key lime pie. And the smell is driving me crazy. I don't know if she can hear me or not.

But I know it's great podcasting to take it to, you know, smells. But I just want people to know, send the key lime pies my way. I'm here for the key lime pies. So good. Chris, I want to end, you know, last night was the first presidential debate, June 27. People can go read the front page of CNN, New York Times, Fox, wherever you want to get your news. People can go read that. But, you know, there are interesting implications for,

investing for investors. There are sectors that work better under one administration over another. You can look at, you know, the small bank, the regional bank index, KRE, is up about 3% today. The Russell's about flat and bonds are taking it on the head. The TLT is down about 1%. Right. Like, is all of that attributable to the debate and people adjusting their odds of a Republican administration versus Democratic debate? Probably not all of it, but I bet a lot of it is. So I just wanted to get your thoughts on, don't have to comment on the debate itself, but just like kind of implications for investing where you're looking, because I know there's one thing you're going to post soon, just any other implications.

Sure. I love stats and data mining. I love following polls. I'm very interested in public policy, less interested in politics. I think that it is very likely that Biden will not be. president next year after February of next year, I think it's quite likely he will not be president anymore. And my comfort level, that's at least two out of three. It might be right, two out of three, but rising, looking at polls, looking at betting markets, looking at especially state level

information makes it likely that Biden will not be the next president, somewhat less likely, but quite likely that Trump will be the next president. From a investing perspective, a problem I have in an era of Republican populism is there's not a cinch on spending and therefore kind of trailing that is on taxes and other things. There's not the kind of traditional partisan breakdown that makes it a little harder to find trades. There's the kind of gimmicky, you know, Trump's back and rumble media and that kind of I think there's a few kind of right-wing companies that can serve as a proxy for Trump's prospects, but you wouldn't want to necessarily.

On the Trump's back, I mean, like, investors should remember absolutely, that is a mean stock and a half. Like, you probably don't want to be trading it. But it is funny that the spec seems to trade in line. The Trump's back, it's DJT now, seems to trade in line with Donald Trump's chances of winning. Like, if they go up, the company goes up. And if they go down, the company goes on. And it's funny because if Trump wins, I mean, maybe he state mandates all employees have to be on truth social.

So maybe. But if Trump wins, it seems likely there's going to be a heck of a lot of DJT stock to sell for sale because he's going to maybe divest it. Maybe he does. I mean, he's the president. He can probably make his own rules. But I would guess he kind of wants to invest it tax free. Get it.

It seems like it's going the wrong way to me, to be honest with you. But I just thought that one was an interesting one. And again, nothing on this podcast. investing advice, but just like meme stocks, stay away. Tax-free is a great reason to want to take a cabinet roll or win the White House. You know, you have the pardon power, which might be useful to either of the people running, but you also have this ability to divest and not pay capital gains tax. It's too niche, but I've been saying for years, if I ever ran for office, my number one thing

would be these real estate investors, it's insane that they can do the 1031 or whatever. The number is exchange is tax-free. Like, that's absolutely insane. Get rid of it. There's no reason for it. I mean, it's probably too niche. That's niche, but it's probably too niche to be like my number two is cabinet members have to pay capital gains taxes when they sell their stock.

Like, why are we gifting them tens of millions of dollars? But, yeah, it is pretty interesting. I mean, you could even just cycle through big donors. You could have one of the less important positions and just have one cabinet post available just to kind of run them through every few months so they can realize capital gains on tax. So, that's, Chris, that's not a bad idea. You could have just revolutionized donoring.

I just feel like I really organized corruption with that thought. But the more serious differences on the regulatory state, which happens faster than tax and spend policies. And with Chevron deference killed today, I think there's a huge scope for a big change on the regulatory front. So merger ARB spreads, I think, would do very well. So people can go look. So people can go look, this is a penny stock, but it actually has a quite big market cap. Matterport, MTTR. The stock is up 6% today. They are in a merger to get bought by a COSAR group and seems pretty likely under this administration that they would get to hit with a suit. And I think that's crazy. But, you know, I'm not the person making the decision. I think it's pretty clear why the stock's up 6% because the suit probably wouldn't happen until after the election. And investors are betting, even if it did, the next administration could

Why did investors are betting, hey, under Republican administration, this salester. So six plus six percent today. And it seems pretty clear why. Exactly. That kind of thing. And if you look at how little is getting done legislatively in the Congress and a decent shot that whoever wins could have a not have a Trump rate, could have a split government somehow, it's possible the House and the Senate will both flip that I don't think we're

going to see a huge legislative change, but both Trump and even more so by. Biden had a huge amount of executive orders when they first were elected. So things that they could make a lot of progress on from the White House and administratively, I think will be most important. My kind of merger is my second biggest category. My first is Freddie and Fannie Pref's, I think. We can talk later or some other time or not talk about the ultimate prospect of privatization. I think it's quite likely, but I think it's quite quite likely that the market will perceive

that it's more likely if Trump wins the election. So kind of the first stop is election night if Trump wins. I think that'll be very good for Freddie and Fannie Preffs, especially if you look at some of the people who are kind of invested and involved, if they're coming into the White House, there's some specific players that I think are quite involved in this that'll be close to

Trump. I hear that. Obviously, people can go read. Bill Ackman's been pitching it, but the one thing that's made me a little bit hesitant about it is, I believe that was the case in 2016 as well. And people, I do remember, people specifically pointed to, Steve Mnuchin, I don't think he was directly invested in the fannies,

but I think he was invested in hedge funds that had like big fanny positions and like a lot of the big donors had it. And people were making the same argument then. And I understand like four years seems like forever, but it's not a lot. And this, the second time around, maybe they're just they're ready to go, more geared up. But though, my biggest pushback on that trade has always been like, why didn't they do in the first administration? Because this was the same pitch. I have an answer to that question, though, which is that the key. a regulator didn't leave a role that required his involvement for a majority of the Trump administration. They got more than 20% of the way through to a privatization in the less than

20% of the time that they had in that administration. They've been working on it since then. I think Trump's focused on it. I don't have the most high-minded philosophical reasons why he's interested in this. I think he's kind of, he's very reactive to whoever the last person he talks to on something and he has supporters, especially the one you mentioned, who are quite involved in this. But I think he sees a route and he sees a route without Congress and he sees a root that his top people are incentivized by. And I am not cowed by that critique because of the personnel that was in that was entrenched at the time that's gone now and he could get supporters in the key roles immediately and have all four years to work on this.

I think you could do it within a year or two. Thanks for that sounds cool. Well, look, that is, Chris, did you run the marathon on Saturday? Sunday. Sunday. I am impressed because, you know, if I go, now I am a little bit post still recovering for sure, but if I go on a mile and a half run, I'm like Alicia, cancel my plans for the rest of the afternoon, cancel my plans tomorrow,

maybe go ahead and cancel my plans for the rest of the week. I need time to recover. And here you are, you know, we're five days later from you running 50, as you said, 50K-ish, and you're podcasting, you're at a standing desk, you're standing, you took an international flight. I'm impressed. So, it's been great. We'll talk before them, but have a good fourth. Stay on the line.

I want to talk to you about one other thing after we hang up. But thanks to everyone for listening. And we will chat next month. Thank you. Nice talking about that. Whether you're a large firm with training and developmental needs or a young analyst looking to ramp up your skill set independently, Fundamental Edge can be your go-to resource. Their Analyst Academy curriculum is a flexible pre-recorded program supported by live sessions, coaching, and continuous alumni

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