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Class in many ways is really what made my career about fifteen years ago. At the time, I was even a student at the business school. I was actually invited into a lecture, and basically part of the class. And the speaker was a funny name that really reminds me some kind of old Frenches. Anyway, in the middle of the speech, listening to Warren, the lights go off just went off, and I figured that I can do something in this business. And of course, at the time, I was pretty desperate, you know, really escaping China, and know anybody having very little connection whatsoever, and not having any money. In fact, I was deep in debt, and I was horribly worried about how do I ever make a living in this country, and really didn't want to be capitalist country. So, in the middle of his speech, thought about what is that about investing? Really, just so different from my perception of stock market, and and the more I thought about it, the more I thought, well, this may be something I can do. Now, I suppose that most of you who chose this class and stand is very difficult to get into this class, at least was when I was a student, is maybe kind of self selected group of people who are already somehow biased to towards value investing. How many of you really consider yourself a value investor, or more predisposed to value investing? How many of you sort of know for sure you're going to be an asset management business? So roughly the same number of people really want to be an asset management business, or sort of already consider yourself as a value investor. So who can really tell me what are the one or two things that really sort of defines a value investor from everybody else, anybody? Yes, please. What are the things? One thing about investing, usually you're involved in a lot of business. Right. So then, what do you think that you sort of feel yourself as more of owner of business in the sense, and therefore your fortune rises up and down with the nature of the business, and how? Please. Yeah, you sort of you demand margin of safety in the sense, anybody else. Right. Right. Right. Well, that's pretty summarises that the basic three attitude out of the teachings of Benjamin. And A, think yourself as basically not a a paper shuffling in the sense you you really think yourself as as owner of the business, and B, you sort of you know you you demand huge margin of safety when putting investment, and C that somehow you sort of think everybody else is different. So this this is where the market and now it's becoming. These three things actually kind of they all.You know, coming to really coming from a perception which is, you know, is you think yourself as owner business rather than kind of kind of owner of a piece of paper, and and and you own a small piece, and therefore you really don't control the business, and therefore sort of is able to benefit from a large margin safety, because whatever value you perceive, you need to be there because you can't control it, and then because you're thought you're really owning the business, and therefore you really don't care, you know, if you're owner business, you don't care that all the time, and so therefore you think that you're somewhat different from just about everybody else in the market, but then the question is, do you really feel you're owner business? Why do you want the stock market? The stock market is not created for this type of people, is right? The stock market is created is a fractionalized so that everybody can go in and go out, is that right? Anybody have a view on that one? Who can tell me that? As I think is really kind of managed by value investors. Anybody, any guess? With that kind of perception we just talked about, there's no real study, but there are number of tens of studies, including one actually by a professor next door in the law school, I don't think, and which really kind of put it roughly under five percent of all asset, and actually consistent from what we just talked about, that you are really not an majority, you are actually very very minority, and the stock market is really not created for you, it's created for the ninety five percent of all people, and that's really where your opportunity is, and that's where your challenge is. So to understand that before going to manage value businesses is really short and important, and that's really what I that's what I first learned when I when I came here and listened to uh, that's one thing that stayed in my mind, and that really sort of helped me to position where I am, but I really know by then what kind of person I am.
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I think most of your challenges, especially those of you who really want to end up in the management business, and actually tonight primarily address to that group of people, sort of the big, the the not, your your biggest challenge is really to understand whether you're that five percent of the people or you're the ninety five percent of the majority. And you might think that because of the training, because you do this, you sort of you intellectually qualify to also that small minority group of people. You may, you know, how much you would change. You know, my career sort of take a little twist as well. I always cover my own fund. You know, part of the time, who sort of mentioned was Julian, was really sort of when he invited me to really share with him because he sort of invited a bunch of the fund managers that he invested in, and also share share ideas. And that's when I sort of get much better understanding of how the ninety five percent of the people really operate, and you know, and tempting because you know why ninety five percent of the people don't do, you know, what you guys are trying to do, despite spectacular success over a long period of time. Why is that? Anybody have a reason? Why is that? Why there's only yes? Yeah, emotionally is very difficult. But if you think that you know, it's very convincing that where the money is over a long period of time, we have much much better kind of returns. You know, you think where the money is. You know, even if you emotionally, everybody think they wouldn't change. Any other reason? Right, right, right, right. We actually very close to the point. I think that the real answer is that's really where the money is. Why that's where the money is? Because the market is really created for those those kind of people who really think about trading in and out all the time, and therefore that they will pay a better return. And therefore, that if you put up with that requirement, that's really where the asset is going to find you. And so the result, that statistic, despite the huge, the incredible performance of that five percent of the spectacular return, consistently over a long period of time, ninety five percent of the money, or something close to that, probably would always reside somewhere else. And if that's where the money is, you know, most people naturally wind up there. So my first kind of point I want to review with you is really to understand who you are, because you will be tested for all this period of time, during future career development. That you're going to really have to really face this to to ask yourself whether you're a value investor or not value investor. Now, if for whatever reason that your personality is built to be a value investor, it probably means that you somehow, you know, genetically mutated through all the the process of evolution that you are very comfortable being in the minority.Which is not really very natural to humans, you know. For our human evolution process, most of us survive because we stick with the group, in face of the most as the only way we can we can survive. And so it is really over, you know, tens of thousands years of evolution is really deeply ingrained to the genes. But occasionally, you will find a small percentage people really survive despite the fact that they really have a different kind of genes. As a result of the mutation process, that group of people survive. So that's the first thing you have to really be very, very comfortable, you know, being very much very soft, and therefore you would naturally adopt and to the right. Not because other people are right, but because your reasoning and evidence are right. It is common sense, but a part of the people said common sense is at least common commonality. Most people don't think that way. And secondly, that you would probably spend most of your time truly being academic researcher instead of so-called professional investor. Most of the time, you would spend as a professional investor, as a value investor, not a professional investor. It's really to be academic, to be research, to be thorough, especially to basically be have insatiable curiosity, to really and try to figure out how just about everything works. Because investing really, the more you know, the better off you are as an investor. And so you you just have to be naturally interested and curious, just about everything, any kind of a business, politics, science, technology, human history, poetry, everything really affects your business basically. So you don't have to really, you know, I don't want to scare you. You don't have to. It will help you. It will help you. And then occasionally you will find a insight that all of those studies.
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Then really give you tremendous opportunities that other people just for whatever reason couldn't deal with. Either psychological, because somebody is either because of the limitation, or they can't because the institution is imperitive, or the institution is bound to all sorts of different reasons. And then you go through. The final is the business. The opportunity given is that cheap is the business. The business is the management. Somebody that I can trust. Either because they're good, or because the external checks are sufficient. And what else is missing? Why this opportunity presented to me? You go through all those checklists, and you feel comfortable, and then you just have to really go over the last psychological barrier to basically do it. So let's just go through a couple examples. Unfortunately, what what I'm doing today, you know, I'm no longer talking about what we own. So I pick a couple examples that I owned in the past. You know, I started this business in '97, and you know, along the way, we just a couple really dramatic events. You know, one is the Asian financial crisis, and then the technology bubble. A couple of different things. But during those periods of time, you tend to have more interesting opportunities. Let's start with the. Let's go back to '98. So it was '498. And I tell you the story that I go through. Very simple, because I'm interested in all sorts of different business. I usually just get menus. You know, I got holded to valuable while I was a student here. You know, every issue with the company, I just you know love to read the whole thing from beginning to end, because that's really the best kind of education if you want to have encyclopedia knowledge base and database. Which you have to. So just go through that page after page after page is just enormously helpful. And the first thing I always check is sort of the new lowest, the new kind of lowest, the lowest, the palest, the lowest that we attract more than the new highest. Now this actually I don't have any more of my copies. I got rid of that. So I asked them for a refund, and the number is not right. I mean, I was looking more of somewhere around. I think it's September something. August. That we started roughly around '28. So this is '46, is not right. So roughly call that '28 to '30. Now you look at this one. You know, what is the first thing jumps to you? Somebody give me a quick read. Yes. Right. Yeah, yeah. And then else. Yes. Right, right. And then else. Then if you're an investor, you don't really care where where it's traded before. I always care. I tell you what before. So that first level of valuation.Any valuation doesn't fit on even one three kind of a globe. Yeah. And so, what do we know about valuation? Yes. Yeah. Yeah, that's a good point. And what is the constitution of the value? So every time you see a global value, I want to say, what's in the book? What's in the book? How much is the book? What? That's simple. You can just call it twenty eight and a half million shares, roughly three hundred something, low three hundred million. Just do a proxy. You don't have to really do all the quotes. And you'll see where it is. Now, the the working capital is almost three hundred million. You know that. And of course, it was the end of the Q three and in retail. What do you know about the kind of end of Q three in retail? Is this is really where your your kind of quick cycle period knowledge really helps you? All retail is built up huge money. The last quarter. So you look back to the previous years to see what is more likely is it really collect a lot of cash at the end of the year? So you say okay, so it's three hundred million almost entire value roughly two hundred seventy five million is in the is in the working capital. Everything else is cash. And you probably collect about a hundred million cash at the end of the quarter if you look at the other two years. So roughly got two hundred million liquid assets and plus hundred million fixed assets. And if you do, you know a little bit more study, you can see it's entirely built in the real estate basic. So three hundred and you're trading roughly three hundred million, and so two hundred million is is is a liquid asset, and then a hundred million is is in real estate. So you got a pretty decent protection on the downside. So what do we know about earnings? The cash flows. And what is you want to really pay most attention is basically kind of the the pre-tax pre-interest earnings, the average. And you want to compare that with average capital that's needed in the business. Get your sense of what kind of business you're having, how much you're making. Give me a quick sense. How much is that? Well, if you're skilled, you should really.
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你不能one second to find that out. You have fifty percent roughly of of operating margins of eight hundred, what eight hundred, eight hundred fifty million. You get roughly one hundred million, one hundred ten million. And what is deployed capital? How much capital is deployed in the business? Roughly. You have roughly about say two hundred million in in in liquid assets, and then one hundred million in buildings, and then the two hundred million of liquid assets probably one hundred million cash. So roughly you have two hundred million deployed capital, and roughly returns about one hundred ten million dollars. So your return on your deployed capital roughly around fifty percent at that point. So this not a bad business. So you shouldn't really start with say you get the five second look at it and say, the business I don't care you know all the other things, the business is trading roughly, you know, rental on the book value, book value pretty clean, uh, is basically consist of of tangible liquid asset, working capital plus, uh, you know, one hundred million in real estate, and uh, and the deployed capital is basically two third of that, and and for that two hundred million return roughly one hundred million so, and so it shouldn't be bad business to begin with. So next you check sort of why this whole thing sort of fall apart at that point. So the missing, and whenever you see something like that, you say, wow, that's not bad. You know, if I own the whole business, remember always sort of think as you sell as a business owner. If I own this business, put in buy the whole business at the price, you know, you probably want to own it. And it actually is not bad name, right? Most people recognize Timberland as a brand, right? So what is the reason at the time? This turn out is that was the height of the Asian financial crisis, that all their competitors, especially Nike, either sell especially in Asia, falling all the clip, and so the whole contingency sort of all their apparel is all their retailers of shoes and international brand anything has exploded Asia all fall apart. But what else is is going on? So you try you try to check you know what other people are thinking about this. You know you you you may not really listen to their voice, but you want to really know what other people are looking at. So you check to see whether there's any analyst report, turn out there's no analyst report. Nobody cover this. What other companies doing one billion dollars? Timberland is a reasonable company, is a big brand. So why nobody kind of cover about this? Any possible reason you speculate? Yes. Which is good or bad for you? Fabulous for you. Fabulous for you. And you go back to say ten, fifteen years. The good thing about value line is you go back to ten, fifteen years, and you see whether they ever really need that money.What did you find in the business over the last whatever years? It's been growing. The profitability has improved dramatically over the recent years, but it's always been pretty profitable. And therefore, the need for financial markets is very limited. Any other reasons? What's the ownership structure? Yes. What do you mean by "family-owned"? The own 40 percent of it. How much vote control? Have a hundred percent vote basically, ninety-eight percent, right? So immediately, that turns off a whole bunch of people. And then you say, well, you know, how the investors basically react into them in the past? You can do a quick kind of a search, and this is really why, you know, I say that a an investor should really investigate a journalist because we have a journalist here. I'm sure if I ask the journalist, look at this question, you know, the first thing you would say would go through all this question that just asked, and pretty easily you can find all the answers and very quickly. And so you kind of have a fair act to a very curious mind, and you just can't really satisfy with any bogus answers. Otherwise, you can't really be in this business. So you go and you find there's actually a whole bunch of different shareholders also. Now you have a owner with a 40 percent owns and almost 100 percent of the vote, and those of the shareholders doesn't have a vote, and you have no analyst cover them, and a whole bunch of shareholders also. So immediately, if you don't know anything about the business, if you were the 95 percent of the other investor, what conclusion you would draw? What would be your conclusion? If you were kind of you know, normal mutual fund or hedge fund trading or in the uh uh investment, what would you say to this situation? Now that you find all this information, please. Yeah. Right. Anything else? Yes. Right.
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Right, right. Anything else? Yes, yes. Anything else? You guys are not skeptical enough. What would you really worry about that the management might be making money from the company might be making money in the books because they control everything. There's virtually no, um, virtually no constraints on what they do, and the fact they're holding the laws so they tell you they complain about something, right? So what do you do next? What do you do next? Well, yes, that's one thing. Anything else? Absolutely, you download every single piece of the document of the court cases, every single case, and read them from page. And this one thing is, you don't have it clear in mind. If you just if you just want to do it because you want to make money out of it, chances are you're not going to do this. You have to read this figure that I just, you know, I'm just curious. What's happening? This this doesn't add up. And you have to take every single thing. As you read everything, as I did, the first part takes less than you know, a couple minutes. You look at that one and say, "That's really one." All the questions you read leads you to all that. So, I'm impossible to find all the cases I can find. You know, all the cases really, really one thing. Actually, really one complaint, just multiple filings. Um, you know, somebody really say, "Well, they used to provide some guidance, and they didn't deliver, and they forget piss off." And so the owner also gets pissed off. You can, you know, visibly see the hands. You can get a sense of the personality by reading those documents. He said, "You know what? I'm not going to do this anymore. I'm not going to talk to the street. I'm not going to get any guidance. I don't need a damn dollar from anybody else. The business is wonderful." Okay, so that removes that. So the next thing, what do you do? Well, if they really run this run this way, the next question is okay. Maybe they're not crooks, but they're good managers. How do we know that other decent people? How do we know about that? How do we go about to find that? What do you do? Sure. Anything else you can do? How do you know the personality? Yes. Right here. Great. What do you how do you tell the difference? How do you just say go to hell? You're not. Most people will tell you go to hell, but it's not. Anything else?Yeah. That's right. There is no going back. But that's a good idea. Now, you want to the point is, you gotta really go. That is again again. You know, just happen to have a journalist here, but I always view this job as investigative journalist. Most people who have do businesses also have a big personality, have a history, can go to audit, have a little trail of evidence of what kind of person they are, and what they have done, how they deal with different situations. It is not difficult, but you have most professional managers wouldn't really consider that as a part of the business. But I'm telling you, you're the five percent. If you're not to be the five percent, maybe you're not. But if you try to be that five percent, what would you do? You go to see their community, you go to the church of Senegal, you go, you know, you go visit everybody, you sort of get yourself to be part of that, and you introduce yourself to all their friends and families and neighbors, and don't just call them, go there, spend a few weeks there. It's worth it. It's worth it. Just to spend as much time as can possibly be to try to find him, find what he has done to his community, what his neighbors and friends thought of him, that tells you more about his personality. And you want to find the family dynamics. This fellow actually only graduated high school, never really went to have a college. Relative simple guy, but nice. He said guy has been very friendly. Go to Senegal, but not terribly devoted. But more interesting, his son actually went to business school as well. Was actually my age at the time, was in the thirties, early thirties, and at that time, already assumed to be a CEO of the company. So I did all of things I suggested to all of you. I did further. I find what this son's all the board of the father.
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The son. I found one of the board of the son was actually one of my friends. So I invited myself to be the board. So I joined the board along with the son, and we become very close friend. And then I really know, and that family is turned out. This is one of the most admired family ever met. They're people of the highest integrity. They're wonderful. They also happen to be brilliant businessmen. So after all of that, the stock actually started to rise. And so that's sort of you kind of answer. You sort of know you know that this and that you sort of say probably not. I didn't miss anything. Other than five percent, just no. Whatever is imperative is not all of them doing anything about it. So what do you do at that point? What do you do? Buy. How much you want to buy? Suppose a hundred dollars. What? What? How much is that? Two hundred. Well, I like to talk to this client because you guys are not polluted yet. Now, if you go to join the fund, the first thing people would tell you is, "Oh gee, don't do anything more than twenty five basis point." And you go, "Is maybe fifty basis point? You do one percent, a hundred basis point, a few basis point." So every number is something big, you know. Why would I do fifty basis point? That's a big deal. That's what is the way. That's what is the way. Secure investments because right now what you're thinking is the common sense. Think about how much everybody put in to get this damn thing right. Think about how good it is. Actually, no downside. You're trading roughly about five times. And the next thing I did is actually when all the different stories say why the last few years the margin improved substantially, it's turned out there was bad going on in the in the especially in the inner cities. That all the kids want to have you know the ten percent shoes and jeans and all the things that you know all the stuff. Man, you're talking about really getting off stock. And you look at how much international business. Actually, actually, shoes in Asia less than ten. Less than ten percent of the ten percent of the twenty seven percent. So you calculate all of this and all of them are gone. You're losing money. So what? It reduces your earnings by less than five percent. So I put shit. Anybody know what happens afterwards? In next two years, when you guys want to have internet, you can check right away. Really? You should do that. This should that. Why do you want to listen to all this shit? You just do whatever you want to do. Is that right? You know, you're right because other people tell you to do a great thing. You're right because you need to do that.You need to check on that. All of those things come to you in no less than five minutes. Otherwise, you're just not a good analyst. If you're not a good analyst, you'll never be a good investor. Seriously, so you have to at least take an education yourself to be very, very proficient with all of that. Well, the next two years, this damn thing went up seven times. And the truth of the matter is, do all this time, I mean, was propelled by earnings. So you do all this time, you're still not having any risk. It's not like hiding, you know, writing some technology company up and double, triple, you expose yourself to huge amount of tech. It was never more than fifteen times earnings, never. But if you trade from five times, you know, to fifteen times, and the earnings being growing about every time thirty percent a year, I mean, that up, that up, and the other people covered the CEO and he had entirely different ideas about how to run the company. It was very articulate. One of the most articulate person ever met, still is. So it isn't hard to talk to general analysts. It initiates not earning guidance, but analyst meetings. And the first meeting, guys, who you know, I mean, he pushed it up. It was me and another analyst, three people, three people, and the last analyst was sort of a kind of, you know, someone two thousand and two thousand. The room is absolutely filled with nearly fifty, sixty people. And they were super, super, how it's kind of initiated some kind of a conversation. Last thing I know, when I have to sell, so that's everything. Anyway, let's go back. Let's say, you know, time, kind of flipping. This is sort of a year and a half ago. Yeah. Nineteen ninety-six. We're going to ask when the lawsuit occurred. They didn't have a better time. Well, we do have this that at that point, because they're probably wasn't right. They built their business really on the reputation of this kind of waterproof. Uh, the very first guy who really came up with this concept of waterproof.
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And so, you know, sort of mix the set, mix the sneakers of those waterproof shoes and non-waterproof shoes. And the marketing that was a mistake, that was a mistake. And it confused the market, and it confused everybody of the claim, and and and suffered. But even with that year, the revenue pretty much still got up. I mean, every one year of the blamish most of the time, they have excellent business quite brilliantly. Yes. It does. That's why you really buy it afterwards. You don't have to. You really buy everything at twenty. You know, you know when they go up, you don't you just have to sit your ass on it. You don't have to do that thing. That's the good thing about really buying a good business. The business takes years, and when it's chased that, you're riding up and down with the with with with the strength of the business. Yes. Actually, no more than a couple weeks. I mean, all of those prices doesn't take all that long. But but but the things happens. You just have to really develop into it, develop into it. And that's why I'm glad my wife is actually so that I know all those mistakes I was doing. You know, the opportunity like that don't come very often. So when it when it comes, you have to seize it. You have to do everything complete. You have to do fast. And that's why you have to train yourself all those time. You don't have to do that thing. Put things into bank. That's okay. You don't have to buy anything. But when opportunity comes, you have to jump on it. And that's what I did. We finish all of the things. It doesn't take all that long, but you take intensive work for a short period of time. Yes. Well, I like to read most because it's something that's going to take. I don't have to find anything. I learn. Then I'm curious about all businesses, and that's why when opportunity comes, within a few seconds, you can tell, you can smell it. How can you really develop this? The only way to do that is just reading page after page. And that line is particularly good because it really puts you know all sorts of different data's and all sorts of of of of years, not just one year. And so, that's the you know easiest way for you to really learn about different businesses. Yes. I don't really care about that show, but shit. Okay, let's go back to a year and a half ago. Okay, so this is fall, and you know this thing comes from this book. I mean, this you know this you know this you know this latest you know standard. Well, you know every every you know every country has a blog. Every country, if you you know want to pay somewhere, every company, you know, just you know as a beginner has a blog for your US company, and which I use, but I prefer to use that line instead because the US company just gives you more information. And for other countries, they don't have that line to go with this. Okay, so I just flip on that one and that's fine. You know, there's one page.You know, jump on, and so that's the page. So, what people can tell you about that page? Yes. What do you mean by cheap? If you really think about your orders, don't think about per shares. Okay, so you just think yourself from now on, don't think about per share numbers. Think yourself as an owner. So, tell me, what is the market cap? Come on, simple, come on. I thought you guys did the homework, didn't you? Anybody did homework? Now, one hand, raise your hand if you did the homework. One hand. How the hell you're gonna make in this business? One hand, you did it, John. Good. Tell me, what is your what is the market cap? Okay. Anybody else? It's very simple. What is the ratio between one dollar? Yes, just divide by five hundred. So do that right now. What is the market cap? What? Eight hundred million. Roughly about twelve dollars. Roughly about what five and a half million shares. How much is that? Don't use that one. Don't use. You use your. You get used to. If you want to read a lot of company, there's a lot of company this one. Okay. Each page should take more than five minutes. And the way to do that is don't use the calculator. Just get yourself into more of a mental little thing. You can read a lot of things, and you finish with five minutes. You get a pretty good summary of the basic information. So don't use all that. Tell me the numbers. Twelve five and
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1000万，OK，是6000万美元。给它贷5000万，doesn't count。 What is the earnings? Last year. Give me the kind of pre-tax number. Come on, you guys, you're the Columbia Business School class. You're the elite. We expect maybe 150,000 dollars of base. What do we people pay you for? What? What? How much is that? Give me the pre-tax earning. How much is that? Pre-tax earning. Just read a few lines before it's called. What is the net income? Total is six months. Double that in the year before is what? 24 million pre-tax, 31 million. You're trading at 60 million dollars of market cap. Roughly about two times. What's your working capital? What's your book value? What is the book value? Come on. Come on, you guys have work to do. This is not good. I don't know how to teach you. Come on, everybody. How does a 236 million? It's simple. 230 million dollars in book, 60 million market cap, 25 million net earnings, 31 million pre-tax earnings. How much is? What is the constitution of the book value? How do you really go about to do this? We have to probably go back to this. Okay, who can tell me how you really do those things? Quickly. Just as as analysts know. What do you see about it? Would people ask you? Would you? How do you really within five minutes tell me the basic sort of structure, financial of this company? How do you go about this? Come on. N. How about your supply? Perfect. Simple. What do you use in businesses? Use some fixed assets and working capital. That's it. And the goodwill can really not account on that. That's it. That's what you mean to operate a business. That's what you mean by owner. If you're owner, you look at something like that. You should be able to tell right away.And if you can't do this, well, it's a blues fault. I mean, that's the basic you you will learn, right? Okay, so that here is the basic thing you come out of this one. Okay, so this one is not giving you a bunch of different information, right? It tells you roughly is trading sixty million dollars in market cap. It has roughly about thirty million dollars in pre-tax earnings. It has about seventy million, roughly hundred eighty million dollars in fixed asset, come up with a hundred, two hundred forty or so million in book value. So what does it tell you? What do you do next? It looks at that one, tells you five minutes. It got this one. What do you do next? What? I don't know. It's cheap. We think it might be cheap. But you're not conclusive. It's not conclusive yet. You have to, you have to go through next to find out exactly what is the earning, what is the book, what is the cost of capital, the working capital, what is in the in the fixed, right? I'm just basically using common sense, common logic. I mean, this is something you have to really take. You have to go through any, you know, this is sort of a useful kind of a, you know, table book if you, if you look. I find all my employees never went to business school and never worked for a kind of establishment management firm and some of them never had accounting because I find it easier to train them than somebody who did. Clearly, I have to really demonstrate here. I mean, if you sort of go to school if the teacher the right way, you should be able to tell right right away what it is. Okay, so with this some work, it really takes no time. Of the seventy million in current asset, you know how much is? It's all cash.
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Securities, treasury securities, about 180 million, about 180 million in so-called fixed income. Well, they reported they own 100 percent of a hotel. They reported 30 million in the book. They also own 13 percent of a department store. We should report on the book of 30 million. It just so happened that the department store is next page. So it's easy for me to find. I turn the page around. I find the department store. I just cover it. It is roughly had a market cap of six hundred million. So 13 percent roughly gives me what? What? Roughly 80 million. So the book can really under estimate the value by another 50 million. And they also own three cable companies, 15 percent. And they also own a whole bunch of real estate. And next, I looked at that department store. They look at boy, has exactly the same profile. They're trading roughly around the cash and securities own about two three times the earnings, and they own a whole bunch of different assets. Turn now to the second largest cable operator, and the next thing I learned is this department store really functions more like a hotel. This not a department store that we understand here. They don't take any inventory. It basically operates more like a shopping mall, and they're partially by taking a percentage off the top line of all the merchandise and stuff there. Okay, so you added all up. Here is what you have. Okay, you paid 60 million dollars. You have 70 million in cash. This is no debt. 70 million in cash. You have another 100 million in stock. That's how much is that? 170 million. You have 30 million dollars hotel. The value has been changed over the last ten years. And real estate in Korea has gone up dramatically over that same period of time. I went to Korea and looked at the hotel. I looked at all the department stores. And looked quite different to me. I checked the recent transactions of all the things in the neighborhood. They all indicate me that the value is more like two three four times what is on the book. Suppose they take it on the book. Suppose they take it on the book. That's another 150 million. How much we have right now? Roughly 320 million. So we have paid 60 million. And we started earning about 30 million dollars a year. What did I miss? What did I miss? Yes. Question. What about it? And the evidence of that happened.Right. Great point. Absolutely great point. Any else? Great point. Any else? Right. Right. Any else? What? What kind of lawsuit? You can do lawsuit from the customer. That's correct. Any company, right? The reason I said for this company, any company. Any else? So far, I haven't heard anything about local market. And I think I would really bother about those foreign investors. What about the local market? What about other investors seeing and looking and thinking? Great. Look at it. So I gave it to you. I thought you were going to do it. Yes. What's that? Absolutely. And how much is owned by the insiders? Well, you don't have it there. It's about fifty percent. You got a whole bunch of different things against you. You also have a whole bunch of different things that really in your favor. You have to go through all of it, each one, and think rationally, carefully. You have to add to that list of the attitude of the local investors, the other people who are buying, because there's nobody from foreign that really understands anything. If you check that. So you go through all that, and we don't have time to go through all that, but you should. And you come up with a solution. I mean, come up with your
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division. As I have, I sort of own it, and what happens to the stock since? Well, again, nobody's ever any computer, whatever you check. Okay, so I have two charts that are that are not directly from Bloomberg. One is that Department Store was trading around somewhere twenty-two. Last check was about a hundred, and then this one, started twelve. Last check is around seventy-something. Each one about five, six times. Anyway, I give a couple of examples just to tell you that this type of approach is not natural to a investor. It's not natural to you. However, if for whatever reason you come to the conclusion that you yourself, you personally somehow fit into the mutagen pool, this is something you might really be looking to do. The only thing I can add to that is that there's a lot of money, as has been repeatedly proved by people from Vanguard to Buffett and everybody else. And I have been the probably just most grateful to this class to lose and actually many years before came to business school to that class and really changed me fundamentally. But what you do have to do is you got to do it. This why I was somewhat disappointed with you know the amount of work I put into places. I tell you, I made a hundred thousand dollars just taking this class, just listening to the fourteen, fifteen people, but I did a lot of work. I'm telling you, you can make a lot of money if you really into this. Not only just listen, but do it. And don't you guys, you know, how much you spend, you know, coming to school here, how much you spend? What is the tuition, the board, and all that stuff? What is it now? Well, seventy thousand, you need at least to make that up. I mean, you should at least make seventy thousand dollars back. Right? You also have two years of not making anything. You got to make that up. How do you make that up? This is a terrific way to do it. And so that's what kind of my last point I want to make is the only reason I come back and really I don't really talk about our holdings anymore. This is actually we don't hold any of those two stocks anymore. The only way to do that is because, you know, when I came here prior to business school and in doing business school, you know, most people do talk about names, and I've been accused, hugely, just by listening and actually do it. That's the difference. And that that was more than you know.Ten, fifteen years ago, I made, you know, about a hundred thousand. It was probably more than a hundred thousand. Back then, I think our cause was a little bit lower than than the seventy and then the millions. I can't remember what was, but but it was lower. And but that's that's your into this class. For this class is different from any other classes, because there's no bullshit here. All everybody's telling you is what works, is what works. And if they don't tell you that one, well, ask them. They should. Maybe I get so that's you guys have a terrific opportunity of being able to get all the points that got into Bruce's class. And if you don't really use this thing, shame on you. You gotta do it. I mean, those things really are so much gold in it. Those pages, those books, those value lies, all of them. You gotta use it. You gotta do it. I mean, you're young. You have energy. You know, let's lose. There's nothing to lose. Yes. Yes. Go ahead. What? Well, the the most. Okay, so if you're analyst, okay, I always tell analysts, I want two things from you. If you want to be analyst, you need to be analyst. Of course, before you become a good investor, you want to provide accurate and complete information. Accurate and complete. Most people fail on both score big time, and you just have to go to that extra end in order to get it up. If you can't succeed on that one, you can't succeed succeeding this. Because most of the time, you're gonna stand alone, instead of just about everybody else. And if you're not really confident about what you know, and you're confident about your prediction, what other people know or don't know, it can't possibly be putting that kind of money.
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When things go into a freefall, when you lose money, you really lose all your money. When everybody else is laughing at you, all the smart guys, you must be able to first do accurate and complete. And the second thing in this business, okay, most money is not made on those stocks I was talking about. Your biggest amount of money you're gonna ever make is not from that. Those things really get your bread, get your basic business going, give you the basic returns. They do not provide you outside returns. Even those stocks when I buy six times, they do not give you the outside returns. If you're a value investor, the two disciplines, okay, so the two schools, you can do the two drawings, you can do the bands, uh, or you can do the Buffett multiplier, which is more of kind of value investing. If you want to be a value, your return is gonna come from a handful, no more than, no more than number on the two hand. Your entire life will maybe fifty years of tremendous insight, tremendous insight. You're gonna gain that no other people have. How do you really build that insight? There's no other way other than basic, continuous curiosity, intense curiosity, continuous study for your whole life. Anything that works. Yeah. Well, I every time I fell on those three scores, I made a mistake. Every time I did really bad, accurate information, I made a mistake. Complete information, I made a mistake. And now I finally have insight. It wasn't insight, I made a mistake. Every time I fell on three scores, I made a mistake. And the money. Well, I'm a big bad. I ever made. I I don't recall we ever made a mistake. I'm a big bad. Now my biggest mistake actually is not making a couple bad. Biggest mistake I made is that doing the quarters for my that you know I had spectacular returns, but I couldn't raise any money. Because every time I go out and talk to people, people basically say, "What the hell are you talking about? I want monthly, I want a two-weekly, I want a weekly returns. I want you to go up in the down market. That's what I wanted. I want you to be a bank, except you do better. But you're a hedge fund, you're a stock investor. But that's you know I couldn't really in the end sort of there was a couple you know couple years now. That's okay. I'll do some of those financial stuff. A million to Julian Roberts, you learn from the best practices about hedge fund managers and somebody else kind of working on the shorting all that, you know, I'm essentially sort of useless. If you're not doingAnd I used to lose myself with all sorts of trades. If you're shorting, you just have to trade. There's no other choices, because you know your upside is underpriced and downside is underpriced. You have to trade. And so, so your really, and your your your mentality changes. What it can no longer really, your basic kind of put yourself into the. What Charlie says about kind of if you do things like that is just as if you, you know, bond your hands behind your neck, asking game. It's true, it really is true. And that was the pure of time. I probably have the biggest opportunity of company that I have absolute inside knowledge that I know, the trading below cash. And something we went up fifty, one hundred times. And I missed it. Couldn't really put myself into it. Doesn't really fit into this model. I tell this shit. That was the biggest, biggest mistake I made. Is not how much money I lost, but how much money I've lost. I make I lose money. Course I do. I do make mistakes from time to time. Usually, you make a mistake when you haven't really quite finished all your work, but you like it, you know, enough so you don't turn away and lose twenty, you know, or some. But after finishing all the work and said, all the problem is with me. And but I added a lot, lot more after finishing all the work. And well, sometimes you, as you're sort of finding more and more, you prove your thesis wrong by then you lost twenty, thirty percent. So okay, so you're wrong. Take the mistake, run, you know, move on. But as with you, if you buy a stock at a sufficient margin of safety, the problem is with you. So if you do that long enough, and with you know relatively smaller amount of bad, course you haven't know everything. Then then you're okay. You're not going likely to lose a lot of money. But if you count really bad on the things you know, and you know you have inside, no other people have it, and that's the biggest mistake. I can't forgive myself for making that mistake. No, I still might have a chance to do that. No seriously, you go through your life, you not have.
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Know more than five insights, and you develop that one over many many years of study. Some of the things I'm doing, really, I find myself doing for 15 years ago, studying the American company, and now I find the Asian counterpart, and I find the valuation that I like, and find I can rebid. But I study that business for 15 years in between, and know everything about that industry, and what really makes that business tick. You need to have that kind of insight. You also need to really, you can really swing with conviction. And if you cannot do that, you're second. Why do you call it overconfidence? You prepare, you just will never really make any real money. But you go through, you do what Vanguard does, what T. Rowe does, you're gonna have your 10-15% a year, and you likely do much much better than most of the professional managers, the 95% of the people, but you're not gonna make all those returns. But they have, have the ability to achieve, and you may not have that opportunity for the rest of your life. Why should be easy? Opportunity of that kind, a few hundred thousand, ten thousand times. The biggest idea is really give them ten thousand times. Opportunity. If one year of life, you're set. Why that could be? Why should that be easy? Definition there's not, and you require a whole bunch of different factors to come together. You know what really truly what it called it, what is terminal, what is politics? You got all sorts of different kind of things working on the conscious level, the subconscious level, the psychological, biological, whatever. You got a whole bunch of forces working together. You got huge wave biology, and you're the one, the only one who have the insight and is willing to bet, backed by sound, complete, accurate information, and huge insight. And that's what you're sort of really doing in this business. It's exciting. It's utterly exciting. And you got to learn everything. You know my interest is just you know I started with physics, mathematics, and got into economics, history, law, politics, I like everything. I'm interested in everything, and that's what you need. You might need models from biology. My wife is a PhD biology. I actually, you know, I learned a lot from her over the years, and actually some of my investment actually know. That's maybe why I should hear the check. But anyway, so you got to learn. You have to learn from everything. You have to be intensely curious about everything. Occasionally, you're gonna stumble into one big opportunity. Now you're still applying things where you know the different lines on that. You know the department situation. You're gonna find those opportunities from time to time. Give you a few times. But that's not that. That's not that. Yes. Attendance. You know it will be probably forever just meaningless because the opportunities are different. You know maybe years you don't really have a lot of opportunity, and then maybe years you have a lot of opportunity. It just sort of, it allIt depends on what really becomes available to you. But one thing I guarantee is, I don't really come in steady pace. I don't really have steady funds. I'm on one week at a time. I never had that throughout my career. Back into the times, you know, when I started was fifteen years ago, when I was a college. At the time I was an undergraduate student. When I bought it, I think through all of that, maybe five, six years of when I was in school, college, law school, business school, maybe I haven't made a big, big ideas that really pay off big. And you know, how do you ever find out? And then afterwards, you know, I get a little better. You know, the thing about this project is, you progressively get better and better and better. To the point you look at a page like that, it takes a couple minutes to tell you right away whether something comes out because something, when you see something, so you get better and better and better. So you might actually have more opportunity, or the market is just not cooperating, and you don't have a lot of opportunity. Good ideas a year goes by. That's okay. But I did not want to a whole year goes by, where I did not learn anything. I did not establish a good inside, or at least thought of a good inside, or destroy inside of what I had. You want to go through every day learning something. It's good. Then just a plan to have. And a year goes by, you have to learn a great deal. Well, I don't look. And a little bit of advancement, and somebody paid a small amount of money and bought a movie right for that. And but my negative, my work, and that was negative because you have a whole bunch of drawings, but I have cash. And so that was pretty good, you know, on balance, you know, my net worth is cash, which is pretty really offset of that. But I do have cash, so I was very, very lucky in that regard. Well, I would say there's only two divisions. All of the things you list as all sort of ideas.
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So when I read biology, when I read physics, when I read history, which is really one of my favorite things, it's all searching ideas. When I do business, and when I find an idea, I want to read it. If I find an idea that actually, say, if I kind of want to do something about, that's how I do. Okay, if I don't have, I do the other one. And then the rest of the time is basically with my kid and wife. You have to let a little, let a little go. Is why I haven't spent now. And really, is you learn from them too, but just to see how human condition really develop, which is enormously important. When you try to really figure out, is my checklist is okay? Is that cheap? Is that a good business? Who's running it? What do I miss? You know, I go through all the checklists. When I go through it, who do I what do I miss? That is hugely important in psychology to understand human condition. And the other places is better in really observing how human development condition from early on. And that's why actually, you know, playing with my children, girls really help me tremendously as investor. Okay, it's all work. And in addition to all of that, I would also add one more thing. Okay, so you know, I said there's a three things to distinguish value investor. Okay, so you got business owner mentality, you have a different time horizon, you demand huge margin of safety, but it all come from one thing, which is for the you business owner and you are conscious business owner. You can't control the outcome of the management. You have to demand a compensation, is a subjective sense of margin of safety. And then because you business owner, you tend to be longer, but they all the same. Now people ask me, okay, if you're a business owner, okay, why the hell you're double with the stock market? Stock market is not is mean is not mean for the business owners. It means for the people who can trade. That was the attraction of stock market. It's only 95 percent of the never buy into this idea. Because if everybody supposedly everybody, this will never happen. Because human nature supposedly 100 percent of the people all are, you know, value investors. Would there be a stock market? No, no, who would buy IPO? Without IPO, where does the stock market come from? Where does secondary market come from? And if everybody demand huge margin, why anybody would sell to you? So that's why I started the lecture by basically saying that you are basically you you you must not belong to the stock market. And therefore, you have always always understand that perspective, and therefore, position yourself properly, and don't get carried away. But if you really, really truly a business owner, then you will be attracted naturally sooner or later into owning businesses. And that's why Buffett we loved it. Mom we loved it. Each of them runs a partnership for ten years and they buy businesses, run a real company.Well, what if you really kind of, you know, into that money, if that you become sort of privately, that's more like rebuilding the sense, but there is even should be as long as humans, but they, vary, vary, with that kind of perspective, they will always find something to do, something profitable to do in the market that's not mean, that's not designed for them. One is that the people designed for a fundamental for the people, the basically they're attracted because they want to trade. And if you want to trade, you're bound to make a mistake. You're bound to really get your emotions carried over, there's fear, greed, whatever the other emotion between. You're bound to make mistake. And so when that happens, they'll always, always be room for guys like you. You know, supposedly you are that kind of that type person. They'll always be opportunity for you. Okay. What that? That's a very interesting question. I evolved over that question. I used to have that philosophy. If I don't want to buy that, I sell. I was used to be my philosophy. And I find myself evolving a little bit from that one because occasionally I find a business, a fine insight that I just like the business so much. All of a sudden, find myself being the real owner. Basically, somebody tried to tempt to really get me to sell because the price is very good. You know, sort of is it is not something I'm willing to buy for that with that price. But my hope is the probability is with me that over the next ten years, better and better and better. And that's really the law of distribution of good businesses. The leaders take just a portion of that capital, and certain industries that advantage, that huge advantage.
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And that's when I really begin to think. Okay, today I'm going to do a different calculation. Okay, you sell, and you may not be able to find another opportunity to buy back. And you have to pay huge amount of tax because at that point, assuming you're right, you're making a giant amount of tax, which you have been borrowing from government interest free. Essentially, if you don't sell, you basically borrow your leverage in your position by borrowing 30 percent or something. I mean, might even be 50 percent. If you by the time you add 20 percent and you know stay all the other stuff, you might you know 40, 50 percent. So you're leveraging your position 40 to 50 percent interest free, and it's not a call upon, and it's definitely loan from the government to you. And so if you can think, and the business will be able to deploy that capital and return it roughly, you know, it's not even 15 percent. Super businesses I usually find is 50 to 100 percent return on deploy, deploy capital, and you able to deploy that, that method is getting very, very interesting, very quickly. Now caveat for value is you have to be confident, reasonably confident, to be able to project that long. And I understand, only a hundred, a hundred opportunities. Your entire lifetime, you'll be able to project that far off. If you're an investment banker, all you do is really project infinity, and that's bullshit. You know it's bullshit. Everybody else knows it's bullshit. You don't know. You can't really project for the next day. How do you know you can really go to you know, some of the next five years, and after another five years, and then the next terminal value of all that shit? It means nothing. It means absolutely nothing. However, I predict if you're good, if you spend your entire lifetime studying, you might be able to come across over a course of 50 years, career, maybe five to 10 opportunities, which you can confidently project with overwhelming odds the next 10, 20 years at that point. You don't sell. Why do you want to sell? You go to government and really lining your money 40 percent compound it interest free, and when ever really kind of out the money back, and you can really project, and the business deploy the capital in order of 40 to 100 percent a year, and also very tax efficient. And that's what you do. That's what you do. Because we have that. None of the business is really in that category. They're not that kind of business. I do have some business in my portfolio that really kind of belongs to that category that I was talking about. That's why I'm not talking about. Business of that kind, and you have to really look for this. You have to find that it's actually established. Over whatever the business established is getting stronger and stronger and stronger.Give me some examples like that. Give me some examples. Somebody study this. Give me an example. Okay. anybody else? anybody else? Give me some examples. That's really where, where that sort of you know why this is really kind of cause of the question. This is why it means you you you really get into the mind. It is the habit of thinking about those things. What really make one business more successful than the others? What is the advantage? Why they're making more and more and more and more money? And some is just doing less and really go up and down. Why is it? Have you discovered any business? By the way, the only way you can find that is by studying the ones already established. That is anything. What? What really made uh, does more uh, more more um than the other ones? Okay, that's a good one. That's something that I really prefer. And then what? Yes. That's a good one. By that.
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Any else? What? Any else? What? Yep. Do you agree with all these? So they're really deciding the portfolio. Yeah, the result has agreed. I've been reading, reading, to agree with that. The result has agreed. Yes, I do agree with that. But I want you to read about something that I haven't bought. Something that you think of. Something that reads sort of. You're ready. Otherwise, I don't want you to just get out and because you got to stand a proof from somebody who's really ready. A firm established as a reading agent, a bad investor. Give me a name that he doesn't own, but also share those characteristics. Give me a name. Berkshire portfolio. Okay, that's another one. Why is that? You just. Oh, you're right, kind of all of them. Yep. What's that? Okay, what company? Why Southam Powers? Yep. Give me all the reason why the tower companies fail. Virtually all of them went through bankruptcy. No, the case out. American Tower. Close. Another one. Well, my company was American Tower, but I was a student. Another one. Any other one? Yes. What? Quarry. A quarry in a. Yep. A fine line, line, yep. Good one. Any other one? How about the ones everybody use? Okay. What's that? Why is that? And what about the competitors? How many of them are there? You answer my question. Any else? Any else? What do you use every day to do research? What's that? Another one, okay. What else do you use? They sure use competitors. Millions of them. Say, with building materials. What? Capital Hill. What?Good for. Everyone, Bloomberg interviews. There is a bridge. The Reuters widely succeeded. Why Bloomberg succeeded? They have very strong money, and you can perform better than many things. Today, I don't know what's going to happen. So you can't be satisfied every day. The only thing that they pay you is something that we have. That's from that company. Of course, sir. Anybody else can come out with this one. Let's talk about Bloomberg a little bit. Is this something you everybody use? Any other reasons you can think of? What? Okay. Okay. Any else? What kind of research? Any else? Primary selling, but it's not trading partners. There, there is far more detail, far more. Okay. Okay. High switching costs. Why high switching costs? Um, people use machines that have um opportunity costs. They're taking a long time to learn all the functionality. All the answers that I heard, this is the best answer. All of the things you talked about is true, but this is really the most important reason. This is why that there will be moments, there will be in any businesses. One of the examples is because is really virtually all businesses you observe now all of them really went through this dramatic example, but they all went through similar type of examples of transformation. And sometime something just happens for an industry that if you really went through different industries, you almost tell where that outcome is going to come out. This is why the study, this is a fabulous case study of how you know a company really comes from nowhere, going into industry, they already have a number of established, long established players, and somehow really begin to make it into a little by little, and then certain
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Lines crossed at a certain point. After that, they become monopoly. Where is the bridge? Where are the royalties? They're gone. They're gone. Partially because, partially because at certain point, exactly as you said, at a certain point, anything that's harder is highly, highly, highly, highly kind of a liability to do your daily work. Once you learn that thing, you do not want to learn that again. And besides, everybody else using the same thing, you have to be able to communicate with your partner, with your colleagues, anybody you collaborate with. The business, the winery takes all. How do you reach that point? It's an interesting question. Suppose you have an opportunity to observe how this industry evolves along. Suppose you really observe and see at a certain point they have crossed that line. Maybe it is the time when they really introduce it to every business group. So that you will graduate, okay? So you learn really, really, really, okay? I have this one available cheaply to me. I learn this thing. But once I graduate, going to the world, I don't want to learn that again. And everybody else using that. Whatever is the time, there will be a time. And that line has been crossed. And supposedly, there is a public. Suppose you have a developer that insight. That insight worth a shitload of money. That's the kind of insight I was talking about. And that is a virtual monopoly business. And you find that again, again, again, you always learn different business. This is not alone. Why Microsoft succeeded? Where is the over Apple? When Apple is a hundred percent market share at the time when they came in, a little by little they crossed that line. So that when you debate between Apple or or Microsoft, they say, "Okay, I learned this thing because I have to go to work." And all the companies that I want to go use, I don't have a choice. Do you even have a choice today of not using Bloomberg? What is the cost of Bloomberg? What is the cost? Anyone know? Nothing. It can almost cost zero. The people don't call because they pay themselves very well. What do we do? Do they do research? They don't do any research. What do we do? They come to visit you, periodically, almost every month, and ask you, "What do you use on a daily basis?" You're a trader. You're ninety-five percent of the people. You just know superstitious. I mean, there's certainly nothing that works for you. I don't think I know all the time. I develop a software for you. Only for you. How many functions Bloomberg has? Ten to a thousand. Does Bloomberg have a manual? Hell no. They don't want to give you a manual. They want to give you individually what on the two, three, four, five, five, six things, and they can charge.Almost every day, you in the business. Every trader can read millions and millions of a law, so you don't care about paying the thirty thousand dollars a year, and if they really charge a ten percent every year more, you don't have choice. You don't have choice, and they keep coming back to you because they know your trader. You go look for different things, and so they continuously to provide you this service, and therefore you are hooked, and hooked, and hooked. You are hopeless. You are absolutely hopeless. You don't repair. Meanwhile, they won't ever give you value. They won't ever let you know the cost. It's not the cost of plasma model. It's right. It's a fabulous business, fabulous business, and make each one of you individually hooked on the product, which costs nothing. And to the point, they really dictate and bully their suppliers. They pay nothing. All they have is software to get you hooked, and who gives them that information? You. Then you do research. They come to you. What do you need? I give that to you. Think about switching from that. Think about the competitor coming up with another product. That each individual, you know, worth a hundred thousand per share. Individually, in a hundred thousand different way, how do you compete? How do you compete? I don't know. What you really why you use that for? I don't know. There's no value. Now, suppose you know that. Suppose it's a public company. Suppose you know the moment of inflation point. Do you want to invest? I would. That's what I mean by insight. Okay. You study every business. Every business, I guarantee you, they all go through up and down and terminal result.
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This one, but we all have more or less the type of dynamics. Your job as a good financial analyst, as an investor, as a value investor, as a business owner, is to study that business all the time and observe the trend. And once in your life, maybe, years, you'll be able to come up with opportunities like that. It is actually available on Bloomberg. Now, he's in that position of selling Alex. He doesn't want to sell. Why does he don't need to sell? Always have a huge premium price. It always always be three times earnings. I have to lose a whole bunch of a lot of time. I want to sell. He doesn't need to sell. That's when I really began to evolve with my philosophy. If I don't buy the sell into something, that I just said, when you have things like that, you don't need to sell. You don't need to sell. Any other questions? Oh sure, any whatever questions? Are you with the business and the management? Well, it's asking the talent of the business. Well, it's all different, you know. I made a bunch of private investment, a certain amount of chairman of two of them, and on the board of several including Capital IQ. You know what we build at Capital IQ? We intentionally copied the Bloomberg business model, and I'm really building another model, and I really copy the same one for the engineers basically. Any high professionals that need that kind of things. So you know, all the things you learn can be applied for different businesses. The next example I have is the board, a lot of the time, the largest shareholder, and a lot of other ones, you know, this on that department. I couldn't even get a call. I couldn't even get a receptionist to take my call. I went to there and visited everything. I saw all the properties, but couldn't get anybody talking to me. A part of large, I like to know as much as I can possibly know. I want to be with the friends, you know, as a temporary situation. We come such a great friend, the CEO, the guy actually become an investor. So that's the kind of relation I want to have. And but you always try, you always try. That every business decision, you can learn, you can observe, you would know the dynamic of that particular industry at that particular moment, and nothing is constant. That's the interesting about business. Nothing is constant, and that's why I have to keep learning things. The things you sort of you conclude, you know, the ones the analysis we just went through with with Bloomberg, maybe a couple years is different. I don't know what caused the difference, but it could be. And I have always been very observant. Take an example of Microsoft. The dynamics different. It's no longer the same. Now you go to free software. It's completely different scenario. Every business.Constant. All sorts of things can cause that change, and that's a good thing. That's a good thing. As long as people with active minds and really active prepared and have the psychological temperament to be able to act when really sees inside an opportunity, will always, always have a chance to be fabulously rich. That's a good thing. And that's the note.