Yet Another Value Podcast - Michael Fritzell from Asian Century Stocks on Casio Computer

Episode Date: November 21, 2022

Michael Fritzell, founder of Asian Century Stocks, goes through his thesis on Casio Computer. Casio makes the popular G-Shock watches, and Michael thinks their rising popularity and a low valuation make for an interesting set up. Michael's Casio write up: https://www.asiancenturystocks.com/p/fb1ac5f5-9ce9-4c56-a930-874d1f73f4c8 Chapters 0:00 Intro 3:00 Casio Overview 6:30 Are watches a dying business? 12:55 Is Casio hitting an inflection point? 18:30 Who's buying G-Shock? 20:00 Casio's valuation 25:00 Does Casio have enough upside? 28:30 Is management really willing to drive shareholder value? 31:00 Do watches make for a good D2C business?

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Visible Alpha extracts data from every line item across sell-side models so professional investors can save time and better understand analysts' expectations on metrics beyond just revenue and earnings. Join our rapidly growing by-side client base and streamline your investment research workflow so you can focus on generating new investment ideas. Listeners are invited to try Visible Alpha for free by visiting Visible Alpha dot com slash value that's visible alpha dot com slash value all right hello welcome to the yet another value podcast i'm your host andrew walker if you like this podcast it mean a lot if you could

rate follow review subscribe wherever you're watching you're listening to it with me today i'm happy to have on for the second time michael fritzel michael is the founder of asian century stocks michael how's it going pretty good how are you uh doing great man i I was just telling you before, we're talking, what is it, like November 17th? I've been obsessed with the FTX stock, but we're going to go with the FTX, bankruptcy proceedings, everything, but we're going to go in a completely different direction here. Let me start this podcast the way to every podcast.

First, a disclaimer to remind everyone that nothing on this podcast is investing advice. That's always true, but we're, Michael, obviously, runs Asian century stocks, so we're going to be talking about an Asian company today. Everybody should just remember, you know, generally foreign companies. companies, a little extra risk, a little bit of extra complexity there. So please remember, not investing advice, go consult your own financial advisor. And then second, with a pitch for you, my guess, I mean, you're one of the few Asian-focused substacks that I know of, and you're always uncovering all of these really interesting stocks. You know, I think Asian stocks, I think

non-for-U.S. listeners, domestic stocks in general are really interesting. You know, the first one we did, I think it was back in May, Tihisagua, was really interesting, is actually done pretty well. And I think we've got another interesting one today. So, and I will say it is a little bit of a complaint or a little bit of a pitch. I don't know, but you do a written thing, and then you do a really extensive PowerPoint thing on them. And the PowerPoints are so good, but I'm such a written person. Sometimes I like, I wish it was more of the written person, but neither here nor there. I guess that's some subscriber feedback for you.

But anyway, a company we want to talk about today is Cassio. They trade in Japan, and I will just pause there and turn it over to you. What is Cassio? Why are they so interesting in all of that? Sure. So, okay. So Cassio is one of the stocks that I like. It fits the profile of this type of stocks that I enjoy looking at, which is basically value stocks. And I think the brand name is one of Japan's best, you know, bar none. It's because it has this kind of niche in the low end watch market with this G-shop brand, which is in my view, just a fantastic brand, which is underappreciated by the market. And the reason why I started looking at the stock is that the yen depreciated significantly against the U.S. dollar. It went from 115 to 148 at the peak, and now it's about 140. And Kasia is one of those companies that benefits the most from the yen depreciation.

It has almost all revenues, or most of its revenues overseas, 75%, and its assets and PPN are in Japan. So they're benefiting from, you know, the translation effect and they also have the cost in Japanese yen. So that was kind of what attracted me to Cassio. And since then, I've been going through this rabbit hole of trying to understand, you know, what's going to happen to Cassio's business and whether it has some potential. I guess I can start with a broad picture of the industry. obviously I think 30 years ago Cassio was a huge thing and we everybody wore these very functional watches and over time I think more people have moved towards Apple watches smart watches things like Fitbit the Garmin especially since 2015 and the question is then is there a space

for another competitor in this lower end part of the of the watch segment And I think, I mean, that's been the broad picture. Luxury watches have done pretty well. Like volumes may be dropping a little bit, but prices going up to make up for it. But the lower end segment, like Daniel Wellington, move, like what do they call fossil and so on, they haven't done as well. So that's kind of a broad picture. And I think G-shock is not immune, but it's actually done quite well. you know compared to the others so just for you know just for reference g-shock is about

60% of the watch segment but most of the profits and that itself the watch segment is 60% of revenues but the vast majority of profits for casio so the other segments like they have some calculated segments they have they produce keyboards in competition with yamaha they also have electronic cash registration so on none of that matters all that matters is G shock that's their key brand name

it has 20% margins the other ones are barely profitable so all you should care about is G shock and I think that there is hope you know even in volume terms and even

if you disregard the everything about the yen I think that this is actually a growth growth brand despite everything that's going on yeah there's a lot to cover there and i do want to come back one thing we will circle back to is everything else doesn't matter because i'm not a hundred percent sure about that but let's talk about the most important thing here and that's the watches and you know i do think you address it when when you say watches to someone the first thought

they're going to have is watches are a dying business and you know i think to some extent especially on the low end that's true like why would you pay 17 dollars for a watch today when you've got the eye like for a basic watch when your iPhone will tell you the time right like your basic cheap watch doesn't look good that it only does one thing tell the time you don't need that today you might need that 30 years ago you don't need that today but luxury watches are booming so i guess let's just dive into the g shock brand right because g shot isn't i wouldn't describe it a luxury brand but it does have function like i remember i don't want to go to cut too far ahead of you, but I remember I was big into running in college and all of my really big running

friends, especially if you did trail running, they'd always talk about the G-shock, right? Like that, I remember that from, at this point, it's almost 15 or 20 years ago, like, I remember that well. So clearly there was a brand and there was a niche there, but I just want to turn over you, you know, like let's talk about the G-shock brand. Let's talk about the G-shock price points. Let's talk about why they've kind of got a niche and all that type of stuff. Sure. Okay. So, you know, whenever I mentioned G-shock, the first thing that people say is Apple Watch. And I want to emphasize the fact that G-shocks are actually pretty cheap. They cost something like $100.00.

And Apple Watch costs $400, but you also need to have an iPhone, and not everybody has that. And I also want to emphasize that they have different niches. So Apple Watch is extremely functional. I mean, it has a great screen, vivid screen, and has functionality, you know, some of which is quite useful. But you also have to charge it. The value proposition for a G-shock is quite different. It's different. You buy it because it's low maintenance. You buy it one time and you know it's going to last for years and years, maybe decades. You can throw it into a wall. You can do things with it. You can climb. You can engage in sports and nothing's going to happen to it, even if you knock it or something. So it's low maintenance and it's extremely durable. So these are pretty much why you buy it. And the low maintenance, like, it might sound silly, but people who are listening, who are viewing on YouTube, you can see I don't have an Apple Watch on. I do have one, but I have to charge it every night. I know it's so stupid, but I always forget, like, there is something to a G-shock or a watch where you've just got it on your wrist, especially if you're doing like hard trails, the durability and everything of it. I do think there's a niche. You know, the question is, I guess let's just talk results, right? So the proof would be in the pudding, right? The Apple Watch has been out since.

it's 2014, 2015. I can't remember the exact year. But it's been out for almost a decade now. Like, no doubt trends can take some time and it took some share beginning. But I do think you would see like at this point, we're eight years in, if this was going to destroy, if people were going to really stop fine, I think you'd be seen in the number. So let's just talk about the recent sales numbers. Like, how has Cassio and G-Shok grown recently? It's done pretty well. Like, it's been growing up until the pandemic. It's been growing, every year, like in unit volumes. And the reason for that is because they're not selling that much to us to develop market customers. They're selling to emerging markets, to China, Southeast

Asia, and Japan. I mean, that's like almost 60% of revenues. And also Eastern Europe, you know, that's another market. So their target market isn't so much us. It's primarily emerging market consumers. And they have less wealth for them. It would almost be a luxury. product for some of them. So I think that's the key. And that's also a growing market in terms of incomes. So that explains why G-shock has actually done in US dollar terms. It's been flattish kind of since then. In yen terms, it's been more violence because the yen depreciated 2012 to 2015 and then it's been more appreciating up until now. So it's been mixed. I would say between 2015 and 2018, there was a decrease in the search queries for G-Shok.

And I think that tells you something. Like, they were hit in developed markets. But since then, the company has restructured and G-shock has all these new models that I will tell you more about. But perhaps I can talk about how the company has changed because that's pretty significant. So 2018, one of the original founders, he passed away. and his son took over. Since then, there's been significant change to business. So he's replaced the management team, the executives,

and the older guard has kind of retired. He gave them good retirement packages, and many of them have left. So you got new blood into the business, and he also restructured the organization into business units where you have development and marketing in one unit that communicate with each other for each product and that helps them to understand customer needs a little bit better

and I know that as a consumer you've seen they have new models coming out which are I think much more attractive and even I bought a G-shock I'm wearing it right now just to show you I was I would have asked you at the end like come on man if you're you've got to have the you've got to have the product if you're going after it yep exactly I like that too it looks pretty nice. And I realize this is the second time we're only doing visual stuff, but I like that silver. Yeah, that's nice. It's, it's not too bad. I mean, how much was it? It's 83 US dollars. 83, okay. And for a watch, that's, you know, I wouldn't wear it every day, but maybe with a t-shirt. And I went to Malaysia last week. You know, Malaysia is a little bit, it's not unsafe, but you don't

want to walk around with the Rolex. For that purpose, it's perfect. Like, you know, you don't have to think about setting it. You know that it's accurate to the second. And you don't have to think about it, you know, if you bump it into something. So one thing, just looking through your deck that jumped out at me, and I think this would be non-obvious,

but it almost feels like you're pitching a, like, look, from 2000, let's say from 2015 to 2020, put everything else that happens towards the end of that outside. Like, you're almost pitching the company, was pivoting, right? Like in that time, the founder dies, the new CEO comes in, kind of old guard retires, and then they start releasing new models. And I think you're, you're pitching, hey, it's cheap and we'll talk cheapness. Hey, there's a lot of cash, so there's safety. But I also

kind of think you're pitching, they're going to hit a growth inflection, not that they're going to become a hypergrowth company, but that growth is almost going to accelerate. And the things that I was looking at was like, you know, slide 41 of your thing, slide 41 of your deck. You've got, hey, collectors are really starting to notice, are really starting to notice and pay attention to Cassio. And you've got a thing with the collector kit who's got like 15 Cassio's in his thing. And then slide 50, if I remember correctly, you've got, hey, we're starting to see some of the models of the watches sell out. So it's not that you're pitching, again, Cassio watches are not going to become a 75% year-over-year growth story. But I do think you're pitching, look, the market's

pricing to set a low P. Again, we'll talk valuation a second. But we're starting to see website traffic accelerate. We're starting to see sales traffic accelerate and I think you're pitching this is going to become a grow through your story than the market is expecting in the near future because of this brand strength and these trends. And I've thrown a lot of softball lobbying questions

but I'll kind of turn it over to you there. You know, it's like all data like search queries and so on, they seem to tell us that the mind share or the number of search queries at least is kind of flatish and volumes look kind of flatish as well. Maybe they will grow a little bit post-COVID. it's hard to say. But what's going to change is that they're releasing these metal models. Right now it's like 14% of sales of the G-shocks are metal. It's going to go up to 30%.

And these costs like four times as much as a normal G-shock. So that's one of these things. You will see, you know, perhaps them going up a little bit in the price range. So that itself is growth. It's not going to be high growth. Perhaps it will be single digit, you know, mid-singing digit, or high single digits, you know, excluding the effect from the week again. So it's possible. And I mean, we don't quite know what's going to happen in terms of new models. They're releasing new models every single year. Next year is going to be 40th anniversary.

So maybe they'll be, you know, in particular next year, there's going to be a lot of new models. It's just hard to say. But I do think that, yeah, it's possible that not only is this a good brand, but you might even see growth. No, you and I are not in our teens or 20s anymore, right? And I do wonder, because we grew up in a generation before smartphones, cell phones, right? So we grew up when I was in high school, having a watch meant you could, when you were in class,

you could look and you could see what time it was and everything. You always had the ability to have time. Like that was right before cell phones and smartphones really took off. I do wonder, you know, my cousins and nieces and nephews who are 13, 8, 10, are they going to look at non-smart watches the same way, right? Like, I'm not sure it crazy matters to a story trading this cheaply. And again, we'll talk valuation a second. But I do wonder when a 15-year-old today becomes a 29 or 30-year-old 15 years from now, are they going to think, hey, I'm going to Malaysia. I need to throw on my non-digital watch.

they're going to, because I don't want to charge it, I want to be able to tell, are they just going to think, why am I going to put something on my wrist that, like, isn't always connected to my Instagram or something, you know? I actually don't know. I mean, it's, frankly, I don't quite know how young people think. Like, some people wear it as a fashion statement. And they certainly do that for. If we knew how young people think, we'd probably be making a lot more money in some other

business. But, yeah. Well, you know, okay. So that's a good question. I mean and I frankly don't really have the answer to that I think the people wear clothes and they wear watches for fashion statements as well like a lot of people wear an Apple watch as a fashion statement not because of the functionality necessarily because and honestly I think the smartphone market is a little bit different than the smart watch markets because smart watches they offer some functionality but it's not it's not all that necessary Whereas if you have a smartphone, you can communicate with your friends, you'll be part of the, you know, you can talk to friends and so on. So I'd imagine, like, Cassio, they've tried to go into these smart watches, smart watches, and they're just not that successful. Like, it's the interface is laggy, the screen doesn't look as vibrant, but if they can do this well, if they can put in sensors similar to Fitbit in a watch that lasts,

for years in terms of battery life, that could be accessible. I mean, yeah. I think that is tough because, you know, these things, I've got, again, third time for people over video, over audio, I've got a smart watch type thing on my wrist, but, you know, the batteries do, a tracking thing on my wrist, the batteries do die faster just because all that tracking and sending the data stuff. I do hear you, though. I just, I'm with you, and I do think history suggests, like, anything that you can put

on your body that you can use as a fashion. statement that you can use to make you look good. You know, even still today, you go to a wedding and, you know, one of my friends has, he's very stylish and he goes and everybody will come on, oh my gosh, I love your watch. You know, he matches the watch to the belt and the shoes. And obviously, that's a little more high-end designer. But I do think for G-shot, you show up to a tough mudder or a trail run or something. You've got G-shock, like, it is functional. You can keep track of your time. You can keep track a lot of things. But you're also like a little bit signaling, a little bit stylish right like you're the runner who's got the watch that you can bang it against the tree a hundred

times and it's not going to do anything and it's going to be there so i do think there is something to that and uh things that are visual things that express yourself do have a little bit more strength anything you want to talk about there yeah i think you know i i thought about this question like long and hard like who's buying these watches and i think the emoji market consumer that's the number one target demographic because the volumes are just so big and then you also have watch collectors and you have people who are looking for something more functional. But I think, honestly, the watch market is so big. Like they have a 3% market share. And it's such a fragmented market that you're not going to see a win-and-take-all like you see in smartphones. That's my view,

at least. So let's go, I think we've talked a little about watches. There are some things I'm going to I want to come back here. But let's just, I've mentioned a few times, this is cheap, this is cheap, let's talk about this is cheap so you know let's talk about valuation cassia okay so big picture you know enterprise value is now at an all time low because of the depreciation of the yen and my argument and i don't know if people really you know agree with me but my argument is that the enterprise value should go up when the yen goes down because it's the international company and its costs are in yen so margins should go up and the same thing happened in 2012 to 2015 you had I think the operating profit went up like three times because of the week again.

And, you know, there was other things happening at the same time. You didn't have the Apple Watch competition, but this should be some benefits. So anyway, the enterprise value to, in US dollar terms, is now extremely low. Now, in terms of the forecast, like they have a target of post-COVID operating profit of 48 billion yen. the enterprise value is 260 billion yeah so that's a multiple of like five or six or something can we just uh i don't think you mentioned enterprise value in u.s dollars just so our it's mainly domestic listers can uh can think about the size in here 1.6 billion u.s dollars and uh i think cap is about one 2.1 or 2.2 billion u. um so that you know it's a small cap you know by u.

standards. They have a lot of cash, $560 million US dollars. And that's not ideal. It's very typical for Japan, by the way. And you will probably want to discount that to some instance. If you look at multiples right now, it's below EVEbit 10, I think on a normalized basis. That seems cheap, but maybe you don't want to put full value on that cash. The big question is what's going to happen to operating profit? They're guiding for. post-COVID, they have a target of 48 billion yen. Pre-COVID, they had 30 billion. So that tells you about, you know, over 50% increase since pre-pandemic. Now, they had several issues during the pandemic. They had China exposure. They had lockdowns this year, which hurt the business significantly,

because China was very profitable markets together with Japan. They have had supply chain issues, semiconductors in particular. That also had an issue. Schools have been shut. The calculated business has also suffered. So all of these things are COVID-related. And I think China is now letting COVID spread, in my view. Like they're really opening up.

This label just got a, this podcast just got a Spotify warning label. But I don't disagree. It's just saying letting it spread is. Or get them in trouble there. All right, okay. I mean, we can discuss that whether it's true as well. I'm just, the phrasing is what I'm laughing with that. I don't disagree with anything else.

Yeah, okay. Well, I think, so these number of issues, it's hard to say exactly how fast the Chinese market will recover. But 200, 250 million people have been in lockdown. And the question is, will they ease those lockdowns? It looks like the stringency index is actually coming down. So everything is moving in the right direction right now. So $30 billion will be pre-COVID operating profits. And most businesses are doing okay.

Keyboard calculators is kind of stagnant businesses, but not that problematic. And then it's just about the time pieces segment, which I think is also flat-ish to actually slightly better than flat. So then it's all about the depreciation of the yen. And I made some calculations and I got to numbers like 40 to 50 billion. So that's the range. If you get to 45 billion, which would be 50% higher than 2019, in the end terms,

you're basically looking at a P ratio of 11. So, you know, that's for like it used to trade it 22 times. it's really hard to say what's the right multiple you know it's a slow growing business but it has a lot of cash as well so difficult to say even if it's six times so let me provide my my first pushback right like this is cheap we we talked about something in the very low double digits price to earnings and that's not giving them any credit for about 25% of their balance sheet is in net cash right so this is really cheap but when you lay out the story you know, I say, okay, this is a little really cheap, but you even said, it's a slow growth story.

And maybe we're going from a slow growth story to a not quite as slow, but still pretty, pretty measured growth story, right? But when you throw that together, I say measured growth story, 10 times P, I just look at that and I say, okay, one of the things I like about this is we've got a brand that has decades of history here. Like the brand does seem to be a little bit strengthening. I do think there's a trend to outdoors, like the very low end is getting cut out. So maybe there's a little bit like I do see some trends there. It's hard to kill, but it's also hard for me to look at this and say, hey, if you and I want to go generate real risk adjusted alpha, real alpha. I mean, maybe risk adjust because the risk here seems lower. But it's hard for me to say, hey, three years from now, we're going to come back and be like, man, that was a 15, 20 percent, 25 percent IRA.

You know, like it's hard for me to just see the. juice in this idea if that makes sense no totally i mean that's what it is like i agree with you i i think that this the stock could double but you know what's the right multiple to pay i actually i'm not quite sure about that and i think 22 times is actually a little bit aggressive for a company that's not growing fast i do think though like i spent a lot of time on youtube and reddit and so on like trying to understand how people think about the brand and i do think it's special like it is special and maybe not everyone understands that, but it's in their niche, they have no competition as far as I'm concerned. They really don't. Like in terms of truly indestructible watches,

they don't really have a competition. So I think maybe 22 times is possible. From my perspective, I'm like, okay, look at the yen being so weak and the stock price is not moved. Actually, it's down almost 40%. Like that doesn't make sense. So I'm, looking at this and think okay risk reward seems kind of skewed to the upside here and i'm willing to wait and i'll reassess the story once we're back to you know post-covid kind of slow growth levels and then i'll think about whether i'll hold it stock or not let me just running through a couple so the other thing that jumps up at me is a piece a big piece of your edict is look the the old guard has gone and retired. The new guy comes in in 2019, and we're starting to see positive, positive transfer, right?

Like, it does seem like the brands getting stronger. They're focusing a little bit more on direct consumer, which we'll talk about. They did de-emphasize the other businesses, which I still want to loop around a little bit, right? So I am there with you, but at the same time, like, the new CEO had been, he was the son of the founder. He'd been with the company since I believe it was the early 90s, you know, I just worry, maybe it was an incremental improvement, but, you know, 25% of the cash on the balance sheet, like, are we really, it's an incremental improvement, but are we really going to see a lot of change to like really realize upside? No, you're not going to see like the capital allocation improved to a large extent. It's still a Japanese company, and I think

that they behave very much like a typical Japanese company. And things move slowly in Japan. It is difficult to find companies that are as well managed as a U.S. company. You're just not going to find that very easily. You know, it's not just like. So the capital allocation is where your mind jumped to, my mind jumps to. I'm sure my listener's mind who know every call I like to ask, why aren't they buying back shares? But it's not just the capital allocation because, so we said we were going to talk to other

businesses. And their earnings deck, slide 25 on their earnings deck, which mentions the calculator business that they have, right? It mentions having a growth strategy for the calculator business. And I see that. I'm like, are these guys with it? Like, come on, get out of here. And then the systems equipment business, which is one below that, which is basically cash registers and stuff, has been losing money for years. It's not like it's a inferno where, you know, they're cinerating Facebook meta reality labs like money. But it's been losing money for years. It's clearly disadvantaged. It's clearly not a good business. And there's no plans to shut

it down as far as I can see. In fact, the earnings deck, I think it's the next side. So it's like 26 if you wanted to look. But the earnings deck says, hey, it's been losing off the top of my head about 10 million, whatever per year. We've got a plan to bring it down to losing $5 million per year in the near future. And I look at that. I'm like, they've got this money losing business. And they're just saying, hey, we've got a plan to make it lose a little bit less money. You know, I'm just wondering like, because capital allocation does matter, especially when you're at this low of P.E. And even if it's not sure bybacks, I just worry, as you said, it's a slow Japanese company.

And they're saying, yeah, we're losing money. Hey, we need to keep a full employment in the calculator business. And you're always kind of tamping your growth and you're upside down because of that. Hey, this is Japan. This is just the way it is. And I think, you know, why do they keep so much cash in the business? That's because if something happens, they want to keep paying their employees. That's why.

So, you know, this business, you're not going to get, you know, full. value from that money. Unfortunately, it's a great product, but the governance itself, you need an activist to come in here. And I'm, you know, holding my thumbs. I mean, I'm hoping for the best, hoping that someone will step in and make them face reality a little bit more. But let's see. Yeah. Now, correct me if I'm wrong, but I do believe that, again, CEO's son of the founder and everything, I do think there's a, maybe not like crazy, like, you know, founders level owns 50% of the company. But I do think there's a decent bit of insider ownership here. I actually don't know about that.

I mean, it's a trust that owns the business. And it doesn't even say, there's no, there's no information that I could tell from the end report or the disclosures that it's actually the family that is, you know, that has benefited from this. I may have been mistaken when I was looking through it because I saw, yeah, okay, I may have been mistaken. taken what was looking through. Last question I'm going to ask, so direct to consumer. Every consumer brand wants to go direct to consumer, right? And there's a lot of reasons why you go direct to consumer, you get to keep a lot of that margin for yourself, you find repeat customer, all this type of stuff. And I just look at watches and it makes sense to me that they're trying, but it does, it seems a little tough for me, especially for a watch that you sell as an indestructible

watch. And maybe it's because I'm the type person who would only buy one watch and wouldn't collect and buy multiple colors and everything. But It does seem a little bit tough to me to really establish a direct consumer business with the watch brand because, you know, you're going once. It's a very infrequent purchase. One of the great things about Amazon is I go and I buy a book or get penny food delivered or something, you know, once a week or something. Whereas with the watch, if you're going once every five years, like you basically have to reacquire that customer every time. So I just wonder, is I know why you would do a direct to consumer business. but is that really a pathway to increase growth, increase margins, or is that just kind of, you know?

You know, I look at their direct-to-consumer efforts, and it looks almost quaint. It's like they're collecting their email addresses from the stores. If you buy a product, you put down your email address, and then they will send you emails. I've received a few recently. And the thing is, people don't just buy one more. They buy several. I mean, some people buy several or even many because the Casio has constant, you know, they're churning out constant, you know, special editions, different colors, different,

you know, different variants with different materials. So there is collectability and some of them really collect many. So I've spoken to people about this and, yeah, even normal people, they own several. Gotcha. Gotcha. That's what I remember with the, what was it? It was Apple when they came out with the iPod. And I remember people would be like, oh, people are going to buy multiple colors. You know, they'll need the pink for when they're having a pink day and then the black and like they'll have colors. And I don't think that I've approved out. But if you bought the Apple stock on that, you probably did all right. So cool. Well, look, I actually think we've covered most of my questions and concerns here. I mean, look, this is a simple story. People can get watches in their head pretty quickly. Lots of cash on the balance sheet, cheap business. And I think the question is just really, hey, just the growth inflect a little faster, or do you get a little bit more aggressive capital return than maybe the market expects?

Because it's tough to see lots of downside unless you really think, like, hey, tomorrow consumers are all of a sudden going to change 70 years worth of consuming and say, I don't want watches anymore, you know? Anything else we should be talking about? Am I thinking about incorrectly? Anything else there? no I think you got it I mean this is you asked the right

question so this is really about a yen bet I mean I invested some of some I bought some shares myself and the reason I bought shares was because of a yen bet so it's a it's a trade for me although I do think it's a really high quality brand and it's possible

you know that the changes we've seen in the organization lead to something more but I think it's a little bit too early to tell so well look I'm going to include a link to the write-up on Cassio and Asian Century Stocks in the show notes, so anybody who's interested in learning more and especially going and looking at that deep dive deck, I'd encourage you to go check that out.

And Michael, this is the second time on, and I'm looking forward to having you on for the third time. Thank you so much. Hey, thanks so much. We'll chat soon. A quick disclaimer, nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned, during this podcast. Please do your own work and consult a financial advisor. Thanks.