Berkshire's 13-F, Buybacks at 100x P/E, and Momentum & Pods' Effects on Stock Prices

Summary

• Box Office Recovery: Theaters saw a strong holiday surge and 2026 looks better than 2025, with Cinemark (CNK) cited as still not too expensive versus the market despite big gains.
• Movie Theaters: Discussion highlighted release slates (Lion King, Sonic), near-term drought in Q1, and how improved attendance breadth vs. just blockbusters is key to sustained recovery.
• Airlines Industry: Spirit’s bankruptcy likely won’t remove capacity; Southwest (LUV) has become more like peers, and the industry is mature, investable, but competition persists due to planes staying in service.
• Quick Service Restaurants: Domino’s (DPZ) and Wingstop (WING) were analyzed—great unit economics but high multiples; Wingstop’s planned buybacks at lofty valuations raise capital allocation risk.
• Application Software: Fair Isaac (FICO) discussed extensively—stellar margins, heavy buybacks, and dramatic multiple expansion drive returns, but today’s valuation embeds significant risk.
• Specialty Retail: Ulta Beauty (ULTA) margins and growth improved post-COVID, yet valuation may not be as cheap; quality acknowledged but outside the analyst’s circle of competence.
• Valuation & Multiples: Apple (AAPL) used as a case study in multiple expansion versus modest revenue growth, underscoring how perception shifts can dominate returns.
• Market Dynamics: Emphasis on momentum and EPS revisions driving price action, creating overshoots both ways and opportunities for long-term investors focused on fundamentals.

Transcript

welcome welcome welcome how's everybody doing hope you are doing well my name is Andrew with Focus compounding on air live with Jeff Canon Jeff how's it going today it's going very well Andrew how's it going with you it's going great we hope it's going great with everybody else as well if this is the first time you're tuning in with us thank you so much for joining us be sure to check out all of our content that we push out into the investing Universe the best way to do that is to follow me on X formula known as Twitter at Focus compound if you're watching us on YouTube right now this is our website Focus compound.com if you want to get access to our archive our blog archive going all the way back to 2005 you can go to the website click the blog section and then you will have access to all that if you're interested in learning about our Money Management Services you can reach out to me at Android focus comp.com and we will start that conversation so Jeff uh how's everything going on your end today is just M 7th sometimes I feel like I should say the date you know it's like on YouTube You'll see a video and it'll say oh this recorded 2 years ago and then you go in the about section and they actually list the date and it was like four years ago three years ago like the YouTube when it was recorded is never accurate so today's December 7th how about that yep mhm how was Thanksgiving good yeah did you happen to go to the movie theaters Thanksgiving a big uh Thanksgiving weekend yeah ever I guess in nominal dollars yeah yeah I mean Cinemark they put something out cinear achieves alltime domestic records with spectacular Thanksgiving movieo surge so you had Wicked Gladiator 2 red one and then of course Moana too which was Moana was the biggest one yeah so I think in nominal dollars I guess depending on how you do it exactly uh Wicked would be the third biggest or something and it didn't even open it was second you know so two of the mo so they both be some of the top movies ever on Thanksgiving weekend um but you know uh but adjusted for inflation not as impressive you know years ago they used to have basically there haven't been major C uh Thanksgiving releases for a long time the uh Disney released things that didn't do well they did Strange World and wish the last couple years and uh so this is much bigger than that yeah so you see any of them uh I've seen some of them yes and I'm going to see more which was your favorite I mean was this the first time I mean I thought it was funny so you have red one which the Rock is in I've seen red one yeah and then you have Moana 2 which The Rock's voices in so I was thinking the it's the first time ever that I was wondering from a promotion standpoint I was wondering I believe it is technically the first time that I can think of that anyone has ever opened t two number one openings in the same calendar month that's a weird record though uh I think that other people have probably had that I can't think of two movies that opened within 30 days of each other at number one or something like that but I can't think of anything that is in the same calendar month like this it might be a record some weird record that way yeah now of course he wasn't supposed to be in Moana 2 because obviously there's a big news about that is Moana 2 was supposed to be a TV show it's been it was recut to make it into a movie and his voice was added and stuff but it was meant to be a Disney Plus show so that's the amazing thing about it it's going to be one of the biggest movies of the year and it was never intended to be a movie really and red one obviously was pretty much meant to be online you know that was the real reason for financing and stuff is not that it was going to playing theaters but didn't red one bomb I mean their their budget was pretty high to begin with right they have ridiculously high budget but you know I with the Rocks could be like that I feel like I mean they made they'll make a fair amount uh I don't know maybe they'll get to 90 Millions it's probably at close to 70 or something right now and it's not going to drop very fast during the uh as we approach the holidays and everything so um yeah I mean it'll do it it'll be worth it to have released it this way you know that's I mean be the production budget 200 million yeah no that that's crazy but worldwide has been 151 million yeah but there's been things made for Netflix and all of those that are expensive Apple you know um and some of them have been released in both movie theaters and um then you know used online too and some haven't been at all so um it you make a lot I mean it makes sense to release them in movie theaters at this point because this is whatever red one is it's going to probably like I said it could definitely make 90 million or something it domestically and it you know it doesn't cost you much to to Market it um in addition because you have to kind of Market it anyway I guess you could just drop it on some service but you kind of have to Market it anyway so um and like Moana for instance it'll probably help make the liveaction Moana which was always planned to be a movie you know coming out in two years or something um bigger because this came out you know it it helps it it helps advertise and everything it'll probably have a bigger run on streaming things you know all that it helps so but we are we'll have some more big releases to the end of the year mainly Lion King um and then we will have like nothing for three months it's like some of the worst I've ever seen uh it's pretty shocking what is being released uh I think there's a week in January where I think officially there's no I don't know what the numbers has I think there may be no wide releases at all the week of January like 3rd or whatever that's almost unprecedented if that's true do they have something no those are all limited no wide releases at all that almost never happens and uh and then I mean we have some shocky ones I could go through but there's like I mean uh there's one that it's I think was made five years ago and is being released I think is among it uh there's a there's some pretty yeah there's some there's some like horror things or something that might do okay but you have almost nothing until like April or something but you do have Lion King and Sonic left in this year so this year will be fine how this year will end will'll be good but then expect really bad next three months like shockingly bad um it's always a bad time but it's gotten really bad in terms of how only during certain times of the year big things are released yeah if you look at the stock price of Cinemark and Marcus Marcus is obviously rated a bit C Marcus Crush did that yeah we were literally talking like we literally like why is this what why is Marcus not moving and then I think that was the bottom there but what do you do here right so I mean what are your thoughts for 2025 box office and then 2026 I mean how much of those future uh box office improvements have been priced into Cinemark do you still think Cinemark could potentially be cheap at these levels uh yeah what would you be thinking if you held camark at at these price levels it's gone up a bunch yeah I mean I I don't think next year we'll be bigger I don't think we'll be back really to certainly not just for inflation even in nominal dollars we won't be back to where we were before Co yet next year so it'll be better than this year but you'll probably keep improving into 2026 is my guess 2026 looks better than 2025 right now but a lot of that is outside of the major biggest movies sort of things um cuz actually even this year the biggest movies or something were fine it's just like a lack of them throughout the year and that's still an issue so lack of films I mean I don't know they they do some things on the numbers where they estimate attendance or something I think Deadpool and Wolverine estimate attendance would be very high like it would compare well to anything from 5 10 years ago any year but there's fewer movies at like say 25 30 million people attending them you know and there used to be more of those so there used to be more moderate hits uh and there's less of that mostly because like there's just less of the Year where they were hits if you remember this year you know until like inside out 2 and it yeah there wasn't a lot going on yeah MH so did you think be big would have been as big as it it was did you expect that no but the biggest movies of the year are always bigger than you expect I mean the the numbers is a good example of that and they'll even tell you that where their estimates for how big movies will be will always be wrong for the biggest ones because they'll estimate they'd be 300 million or something and they'll always be movies that break out and do 500 or something but they don't know which movies they are so the biggest movies are always bigger than estimated basically like people had high estimates for Deadpool and Wolverine but they wouldn't have been as high as it turned out to be or something like that yeah so I mean compared to other stocks yeah they're they're not too expensive movie theater stocks I mean even if we're talking about 10 times EAA or something where EAA is likely to get better for next couple years yeah I mean that's not cheap for all times for the stock probably but it's cheap for um versus other stocks probably so yeah but yeah they've gone up a lot obviously I mean cinar it's over 100% this year right in the last year there we go year to date year to date 150 yeah that's up a lot yeah and then you can even add on IMAX which is another one 72% year-to date Marcus now 56.6 which as you can see it started to really perk up uh beginning of October oober is yeah I mean that's sometimes a surprise how that works out but I also think to some extent they seem to be trading like um just higher risk things I guess if that makes sense they don't trade just on box office type stuff they seem to do well when stocks in general are doing well and you know higher beta things and whatever doing well it's not purely just how's the box office doing and how it's expected to do in the year term mhm can you believe that the market I mean Total return 29% year to date yeah yeah that's one of the I don't know but it's got to be one of the best in the last 25 years or something it's got to be right up there and it just shows the timing I mean if you would have said the Fed was going like I mean rates have just kind of marched higher right like at least the 10-year um valuations are stretched I mean if you don't own mag 7 I don't know how much you've participated you know well you could have owned the box office related things we just saw that I mean they're actually better than the mag 7 Mag 7 what like a Facebook or something's half of up half of what Cinemark is probably I was talking to a uh an investor in the fund and our performance in the fund is it's been great year to date I mean better in the market and I said the part that sucks is we owe nothing Market related we owe exposure to any of this the beta or anything like that and I almost feel like cuz the market is up so much it's almost like oh wow it looks like we own a bunch of Market related stuff yeah happened that how amazing the correlation is when you own things that have no relationship to the market yeah it's baffling sometimes that way but that's the way that it is a lot of things do go up like I said you know be they seem to be pretty highly correlated some things now there's other periods of time where that's not true and that obviously wasn't true you know during covid or something things were not moving together right like there was the co type things that were doing well and the co you know things that are harmed by Co so there's years where that wouldn't be true if we were in an economically sensitive time we would not see the same correlations you know you'd have like things that benefit from a you know cyclical type things and non- cyclical type things would be doing very differently it's just kind of loose Financial conditions uh some optimism good economic results some pretty steady a lot of things can move together you know can you believe Bitcoin cross $100,000 it was up to like 104,000 even so there you go Bitcoin do coins at like 40 cents now up from 8 n 10 cents yeah so we just said you could own Fang things you could own Bitcoin you could own theater stocks they all show similarly shockingly good results I don't know why the underlying fundamentals are similar you know so mhm yeah crazy crazy crazy want to uh get your thoughts on spe Airlines bankruptcy okay uh Equity holders are getting Bagel uh but more so generally on the industry I had a joke that the aah holic hotline was ringing off the hook um we've talked a lot about Southwest Airlines you've R about Southwest Airlines a lot uh yeah what are your thoughts how does this bankruptcy affect the industry if at all do you expect them to get acquired what do you think yeah I don't know that it affects the industry that much and some of these things it might even only encourage make it more possible things could get acquired later so it might not matter that much that's kind of the problem with Airlines right is that usually while they don't well sometimes the government blocks um um Acquisitions of things it doesn't really result in a lot of capacity exiting because they don't end up you know we're all full on liquidation yeah someone ends up owning the planes and flying them right or leasing them and flying them yeah um I I mean Southwest you know hasn't been great obviously you know it had a very impressive um run as a company a long time AG go and then as we kind of went over there was some podcast where we talked about it's become more and more like other airlines over time and so um and then what we've seen with Airlines is the things that are more exposed to International things premium things upch charges for things have done a lot better than the discount type things right so you've seen that too but I don't know if that's unique you know I dollar stores aren't doing that great right now and stuff so that might be part of a larger thing where it's super low end things that sell based on really low advertising prices have not done as well in their Industries as other kinds of businesses that's pretty Universal right now are Airlines in your mind just always in the to hard pile I don't know about that I mean in the United States passenger growth is not that fast capacity is not growing that quickly um it's pretty mature into industry has fairly few players it's been very hard for anyone to get in and stay in and be successful for a while now it certainly looks like an industry that is investable yeah it looks okay um like you won't have the same kind of losses as before but what does that mean I mean it might make it just like lots of other industries that aren't necessarily that great but if they're cheap enough and if you expect better things for them for a while then you'll do okay but yeah it seems like it's a very different industry than it was before yeah I I don't think it would be easy to start up new airlines in the United States and have any success with them or to come in um yeah it's the Bears to exit exit portion that I hate I mean it's not like they're scrapping planes and capacity comes out you know and it just goes more to uh other people that's the part that sucks about the industry like you said somebody else will just buy them and fly the planes so that competitiveness will always be there you know so that's a one-year chart that we're looking at there for all of them yeah okay yeah yeah um yeah I mean I I mean I think some of it even like with the Buffett thing where he invested in them and then you know sold out and everything it was a onetime fluke thing about covid you know I I think some of it is luck that way too that could happen in lots of different Industries and did the same thing would happen if you were movie things you wouldn't be doing better off now than you were before then if you bought into them and then you feel like you had to sell out of them Cruise Lines you know so I think something that would be hard to predict that way and I do think that over time like we saw the industry is much more uh commoditized in terms of very low differentiation but only a few players usually if you have an aopo with not a lot of differentiation it's okay like it's all right they may be value stocks from time to time yeah mhm when you talked about uh dollar stores so a little bit of a different Market than the people shopping at Ulta but want to get your thoughts on uh Ulta beauty obviously somebody at birkshire Ted or Todd uh owns it and want to uh pull it up on quick fs and see what your thoughts are the stock was up a bunch really Bunch like mid single digits basically after they reported this week um but you could see e to sales 1.7 times yeah let's un you know underwrite this on packet and get your thoughts on Ulta from the perspective of looking at it on quick FS yeah I think the thing it's hard about is what we talked about before which is that what if there things that are different now than there were earlier and it's likely to make for big changes um where it's like overpriced because you know you'll have declines versus what it was preco basically uh I I mean I don't see a lot of that the gross margin is higher you know by quite a bit we used to be 35% now it's like 39% you know Revenue growth is higher but not radically higher since since Co actually it's only a little bit higher probably um so you know it used to be pretty steady grower even in the years before that and the Improvement in the gross profit drops completely to the bottom line right so it's like 3% to 3% higher in terms of an operating margin and you know that's that's would mean that your P of what is it 16 now if that reverted to what it was before it would be more like 22 24 something like that so that that's kind of what the concern is that it might not really be that cheap or what when we looked at it before I should say that might not really be that cheap um and for me it's not something that I can evaluate right so that's the problem um but it doesn't look you know on the numbers it doesn't look like it there's other things that changed a lot more since Co than this so I mean the the bigger thing is the long-term thing that is an industry I don't understand you're talking about something that went from three billion in sales to 11 billion in sales in 10 years um that's pretty impressive you know gross profit quadrupled um operating profit quadrupled so that's just you know it was a growth stock before Co so I don't know if it's just purely something that's happened since then um it's way outside of what I can evaluate though and now it's it's not so much you know cheaper compared to other things where as it was before so but yeah f financials it looks like a great business right like the Returns on Capital everything that we saw yep Buffett or somebody at uh Berkshire had a another interesting we could look pull up there 13 app that came out let's see where is it at uh November 14th you could see he sold some more Apple which was to be expected sold some Bank of America why do you think he's selling Banks or Bank of America so much I think it's an a thing and those I think that originally he didn't want to sell Apple and Bank of America uh seeing them as more longer term things that he wouldn't sell even if he thought that he said Bank America was a special deal it was different than the other Banks and then over time now I think he's been cutting those so I I do think that it's like age and transition related or something like that probably those two MH sold uh some serus XM mhm that went through the uh we had talked about that before for now it's one stock yeah uh-huh uh-huh uh couple buys though oh sold Ulta right yeah uh um but bought Domino's Pizza and pool Corp yeah very growthy stocks right yeah mhm so we could pull up probably not Buffet purchases definitely not both purchases you know who is this is this a Ted thing you think this looks like a Ted purchase yeah yeah might be yeah uh price earnings 28 times e e to free cash flow 41 times um I haven't looked at Domino's in some time but I did look at Domino's Pizza group couple summers ago the uh is that one that trades in uh on on the London Stock Exchange okay so yeah there's the publicly traded one in the United States which also owns in you know um which is the basically the main parent company and then I guess there's when in Australia four technically something like that total if you take all the ones that trade around the world the UK like you said is the one that was pretty cheap compared to the US One often yeah although its results hadn't been as good recently although now the US one isn't so amazing either so they're probably more similar results recently in terms of sales and things like that like growth yeah I mean growth slowed it was negative 1.33% uh year overy year now how much of that I mean they're incredibly tough comps probably from when people were just ordering pizza a lot and staying at home during covid right but but gross margins have gone up a bunch MH yeah um it's a really good business uh but I mean it's it's it's 20 times EBA or something you know just I guess it's a style that's different than like Buffett I mean he's never paid I don't think he's ever paid a multiple like that you know no for a business no never has and it's and then Al was a quick flip too yeah although it's fair I mean I didn't we didn't check the stock right on that but it's always fair to I I think to flip a stock if the price changes radically from when you bought it or something I mean that that's you can change your opinion for lots of reasons but I if someone bought cin Market it goes up 150% and then they sell or something um yeah then it's kind of like the price is different so you decide to make a different decision but there could be other reasons why someone would do that too um yeah no I mean I I think the turnover is higher in the non- Buffett part of the portfolio than the buffet part yeah and some of these are also smaller they never got to be that big a position so you know you've seen that a lot more often it's tended to be the very big positions I think even for the other portfolio managers have lower turnover than the smaller ones which they get in and out of faster which maybe like they never developed it into a big position or what happened yeah I think Bill Miller had said it's good to have a concade portfolio and then have you know a part of your portfolio where you have a bunch of smaller like 1 to 2% portfol positions just to stay active and basically restrain yourself from touching the uh like the larger portions of the portfolio and just letting the swings affect you like having some activity to keep the brain active you know kind of scratch that itch if you will and they may do that the other two Buffett does not yeah that's for sure mhm yeah like a bunch of one I think he said that I think actual quot was like 21% positions or something just and I mean my memory of Bill Miller's portfolio is that that's true MH um that the top 10 stocks or something might be as big as all the rest of the portfolio almost but then there's a ton there's probably a couple dozen 1% type positions yeah mhm mhm so on the last podcast we talked about FICO and just the crazy valuation yeah um this is my other favorite incredibly expensive stock Wing Stop and you know they announced on the 5th that they are going to buy back another $500 million or they add an additional 500 million to their share repurchase authorization and this thing is trading at like what you 100 times earnings and it always trads out like 100 times earnings which is fascinating to me um but this was something that was interesting so they added 500 million and then in this 8K they said with this additional repurchase authorization the company anticipates executing a 250 million accelerated share repurchase program that will commence in the fourth quarter of 2024 so I was concern with FICO too we talked about that that when I bought it you know at 100 times artics you know yeah well the it used to have much more impact the share repurchases do when they're done at much lower you know earnings per share um you know pees yeahh they they they lead to more earnings per share growth because they're a larger percentage of the company yeah I'm like are they just going to go out there and just start ripping you know shares from the offer and just putting that money to work you know yeah I mean it's a concern because if you look let's see let's go look at them um that's actually a lot of there so like it shows free cash flow there um let's see where are we yeah if we look at the free cash flow statement the cash flow statement we could get an idea of why I'm saying this right so they are doing 250 million yeah and their largest cash flow from operations ever is right now at less than 200 million yeah so they're using all their cash flow from operations Plus more to buy back stock so that's great if your stock is cheap and it's not so great if your stock is expensive and so you know it's kind of like if you have payment in kind or something type things you know you basically you're getting more shares over time you know you're getting more ownership over time you're not getting that money returned to you in any other way um yeah I mean it's just it's the world that we live in right now it's insanity I mean the thing that's more a big deal we should point out like hard a while ago but it's just crazy it it it's a good business I mean it has a really good kind of unit economics you know Domino's FICO those are all great businesses and um but it is what did we just show like 18 times sales or something I mean that's trailing type sales but I mean the sales are sales might be go up 20% % a year but they're not going up you know 100% a year so it's going to take a long time to work that down into sort of a normal level I mean it could take they have to keep growing at the let's look at it to see what I mean but if we look at the quick FS thing recently let's see how far um yeah at the rate that they're going it will take them three to five years of growing at this rate probably to get down to a just somewhat expensive like an eight times you know price to sales or something like that um now you are buying back some stock but it's very small part of that so just it would have to the stock price would have to go nowhere for like 3 to five years to get it down while it was still growing at like 20% a year to get it down to like kind of a normal price to sales you know that's the problem that you have um I mean it's kind of the question I ask people is like okay if the EV to sales is 18 as in this case How likely is it it goes to 36 and How likely is it goes to like nine you know you have to kind of think about it that way EV to EBA do might be a great business but How likely is it is it more likely it goes to 30 times eeve to EA do then to 120 and if it's more likely then the risk reward is kind of you know skewed that way and that's the way that we have with all of these companies that are while very good businesses really high prices you know there's just a really big difference when you're talking about 20 * P versus 100 time PE you know and we say PE but it's all these numbers as you you can see they're on the every single one of them is really high it's high on every basis yeah could it just be that so much of the market is Factor investing and momentum and pod shops spending on next quarter next year sales being higher um I mean you talked about aqr they release a report and have markets become more efficient or less efficient and you had said that you agree with aqr that they've actually become less efficient and um yeah I mean so much of the market I mean that's the topic I wanted to discuss because when we were talking about FICO a lot of people had emailed me this uh blog post what's driving stocks and I'll I could put it in the description and somebody wrote A Blog so I guess this was a a blog post that someone was allowed to post from a substack okay and he said the other day I was chatting with a good friend and our conversation went something like this I just don't understand why my stock is getting hammered sure the near-term Outlook isn't that good but by 2026 this stock will print scads of money and then the writer said my friend then goes on this five minute rant about how this industry is set to explode he explains the fundamentals in a way that I could only dream about being half as articulate he knows the story cold he has thought through every angle the short-term is challenging but he is completely convinced about the stocks long-term Prospect effect and I think he's quoting the person that's talking about the stock I watch all the stocks trade and the short interest is actually increasing this makes no sense what do these short sellers know that I don't and then the writer said you're thinking about this all wrong you're assuming the market is efficient it's anything but I bet I can explain the movement in your stock over the past year and he says really how he says stocks are overwhelmingly moving on forward EPS revisions explain and the person says but why would they short something that's so cheap and then he says cuz these managers aren't thinking about it as an individual stock they're thinking about it as a portfolio strategy let's pull up your stock with the 40ps estimates and see if it correlates to the price action and the stock price in this has correlated with uh EPS provisions and analyst uh estimates and he says you see how the periods of rising EPS forecast positive revisions saw your stock price gain and then look at what happened when revisions went negative the stock price fell you're wondering why your stock is getting hammered over the past couple of months but it's obvious that EPS revisions are comping negative and he says in reality there isn't just one factor like EPS revisions that could explain all the movement but it was an easy prediction for me to make because this Factor has become so important and then he you know talked about a different guy but it's just momentum and um quants that they're not it's not guys like Marty Whitman or or um you know Buffett going out and like just waiting for things to get super cheap they're betting on next quarter next year but also just momentum in general as a factor and just basically our price takers so I almost wonder if that is going to allow things to really overshoot I mean we know it overshoot on the upside but like overshoot on the downside as well um so I wonder how that all ties into you know the market becoming actually less efficient over time because prices really are going to become distorted for reasons where if you could look out next you know two to three four years you could get some pretty good opportunities because so much of the market at pod shops they're just betting on next uh next quarter or the next two quarters and if it misses or whatever they'll just puke it you know yeah your thoughts on that well that's the problem that you have when things get to be as expensive as the ones we talked about is that where it really hurts is when there's a transition in the perception of the company usually so I mean one is Market environment i s talking about but if Financial conditions aren't really that tight ever or anything then I don't know how much things change I mean truthfully like it's not that common I would say historically for the entire Market to rate to a more reasonable p ratio from a not so reasonable one without like a recession or something like something usually happens that causes that and it's more the magnitude of it that's determined by what that is rather than just people suddenly waking up and saying well 40 is too high it should be 30 or something it's um more likely that the distance of the fall or or the recovery in it is determined a lot by that so you know like coming out of the great uh you know coming out of the Great Recession or something like that or the coming out the Great Depression let's say in the 30s is a good example too then stocks go up a lot because they got so cheap right but they don't necessarily start going up until things are positive you know or the perception changes that way it's just that it determines more the size of it and that's what I'm saying here it's more how much upside do you really have versus how much risk are you taking is it just that you're taking an incredible amount of risk um and then the other part of it is the transition is that at some point there's a change in perception of the company where the perception of these companies is very positively growth likee and that's not always the case you know FICO is just as an example because you know Wing Stop's not a good example because it went public and it's been like this the whole time and everything and it will change its perception eventually but FICO is easy to do because it was perceived as just like a value stock you know um back in uh you know in say like 09 uh 2010 2011 even um and then it's completely rated to a different level right so it's easier to see when you have that example in the same company um for people to see that that transition happens that things that are once considered great grow stocks now are value or vice versa um whereas the new things it's always hard to tell that that will eventually happen to them um but it happens even what we've had a huge change in Facebook from what 2023 2022 I guess to now or something um so I mean it's got have had a couple years in a row that were amazing in terms of multiple expansion and everything so it was perceived at one time to be almost as cheap as value stocks that we talk about right and then that changed um so it yeah if you can predict you know what the change in how people perceive a company will be then that's how you can be very successful and that is one way that in the long run buff it was very successful was finding things at a time when people didn't recognize how great a business they were and then holding them as they were rated to be really considered something special and that's kind of the case of what happened with FAO I think I mean the other side of it is look at Celsius right how expensive that stock was and as soon as growth slows I mean we're down from about 100 bucks to 28 uh $28 and you're still at I mean how much how many times sales I mean we talked about this on the Pod was like four times or something like that you know okay I mean Celsius and and Wingstop and those are a little different because they're really competitive businesses so they can grow a lot faster celus grew much faster than FICO ever did um but then it can also change in terms of the profitability of it and everything and you know people's perceptions of a way that make it a lot more negative quickly um which is less likely in something like FICO um but that doesn't mean it still won't rate by a tremendous amount I mean some of these they could decline by 23ds and they wouldn't be particularly cheap yeah mhm if you have a p of 100 or something so um yeah it I mean let's see I mean what is f is it FICO I mean over 10 years is it high single digits Revenue grow it it's not even that right a lot no I think the it's 8% there you go earnings per share EPS growth raising prices people I mean from us posting that and people responding they're like they could raise their prices three or four times and people wouldn't blink it on yes uh I believe that's true cuz when I looked I I believe that almost all the increases that I could find in the last two years are probably explainable why price increases um obviously it's a little complicated they don't have just one price and everything but but you can see that you know obviously with gross margin of what happened there that's one of the easiest ways to tell but even just really the operating margin doubled you know and that was mainly I shouldn't say mainly but you know you had a really big increase in the gross margin over over 10 years you had an increase that's really surprising from like 68% to 80% but also some of that is you know maybe where they focus on stuff because Gro margin probably was always like that in their best business so um what's concern I don't know I mean if you look though at the share BuyBacks that's the part that of this that fuels concern for me of like the feedback into it of this isn't necessarily so if you look at let's see where do we have okay so free cash flow okay um let's see yeah so you see okay so you have diluted shares so you can see that there's been a big decline over time in the diluted share count right okay but if you go to the cash flow statement you can see what I mean so in 2015 they bought [Music] back 130 million right and that was 6 and a half% we saw of the share count went down so I mean it was probably even more than that in terms of BuyBacks they probably had some share issuance too there stock based comp there was so that really made it decline a lot now they're spending 800 million on BuyBacks to achieve a lot less you know so that's the problem is that they're kind of buying in at that really high price that that's probably the other part that kind of concerns me about it but um and a lot of companies do that you know share BuyBacks are not always the best timed right so sometime I mean sometimes companies do them at prices that are like um I mean because at this point the company had mostly because they did increase debt over time a bit is my memory so they've for most the last 10 years they've almost been 100% of operating uh cash you know cash flow from operations on BuyBacks which is you know not bad that's really good and so the fact that the company requires almost no capital and that it grows through price increases and stuff it's like a c candy that way and so where with C candy they paid that out in dividends to Berkshire here they've used it all the buyback stock I mean it's it's it's crazy I mean look at uh their cash flow from operations and then look at what has to go back and uh capx right and even looking at their income statement I mean it's mhm it's the margins everything are just so impressive yeah yeah and so as we can see here you know this is basically human capital as they say you know that's really where a lot of their Capital has to go to or expenses yeah and going human capital there they're mostly just a technology I mean yeah I mean it's crazy I it's not like you're going to build like a massive gig Factory or you have to increase capacity or anything like that what do they have to increase bandwidth maybe you know and even that's cheap nowadays but it is interesting just to note on this so in where we see from 2015 to trailing 12 months you can see it's a pretty much exactly a doubling of Revenue now let's go to the key ratios to see how much from 2015 to today the market cap changed so if you see yeah one 2.6 billion to 47.4 billion yeah so we're talking about a market cap that went up you know not quite but close to 20 times on a two-time increase so it's a 10 times increase probably yep you know it's a 10 times increase by some of the you know price multiples and things like that MH um not as Extreme as that because they bought back some stock too but um yeah I mean we've talked about this before look if you can predict changes in the multiples then that's going to matter more over most holding periods than the actual business performance unless you're in some really amazing businesses now something like Celsius is growing so fast that yeah if you can pick things that grow 100% a year then the business performance will matter a lot but for most other companies if you can find things that you know even if something doubles in 10 years to offset that you would need to have like a difference in terms of the business performance like 7% or something that's a big difference so you know avoid things that are going to be cut in half and find things that are going to you know double their their exp multiple expansion and you that'll make a bigger difference than the the growth yeah I mean why did Apple get such a huge multiple expansion I mean sure revenues mid single digits right I mean let's call it 8% done well um but a lot of that as you could see right here came from 2021 other than that it's been kind of a lot lower but the multiple on that stock went from [Music] what less than 10 to now uh what does it say 40 times yep I don't know that these things are always easy to predict um I do think that Buffett probably bought Apple at a time where it was transitioning though from one type of holder to another which is your big opportunities and your big threats of when you know you find something that was an attractive growth type stock it's no longer and now you find it in terms of quality or whatever things it's just shifting from one kind of bucket of something to another you know um but yeah it's a everyone wanted to own Apple at some point just as everyone wanted to own meta you know um and at another point they didn't it's hard to remember that a few years ago we've talked about that with Microsoft too that's happened twice probably in Microsoft's history that you know it was pretty cheap and then it got to a very high price again so it's been perceived as being really good quality quality um do you have any thoughts on like the momentum factor and how that affects prices I mean a lot of people not I mean a good amount of people response to the FICO pod was was sending us this blog post and um wanted us to bring it up how it seems like a lot of the clows and whatever you don't think yeah no no I don't think they'll stop working it's the same thing I've said with like AI things and stuff even if there turns out to be a bubble in those of overspending gone for a really long time because someone would have to not it's so far away from the consumer and someone would have to notice it here I mean people if they keep holding the stocks and keep counting them if you count them in your brokerage account 100 times earnings or 10 times earnings the stock and you just go by the market value it doesn't bother you to own something this 100 times you just say that's what it's worth I could sell it tomorrow for that and that's true um I think ultimately it doesn't really it's a difference between frequency and severity here I think people like winning like things going up that they own with a high degree of frequency but the problem with that is eventually that could mean that you have very severe losses for not very severe upside potential eventually and that's just I just think something's a lot more likely to decline to 50 times earnings than to go to 200 times earnings but you know um if you look FICO started the year quite expensive and had like I don't I don't know literally year to date yeah probably cuz we're near the end of the year or whatever you could see I mean it probably was pretty expensive and then I don't know if it was 60 times earnings or whatever it was and then went to like a 100 or something I mean like it went up a lot while it the PE Ratio expanded while it was already at really high level so right um yeah you think stocks tend to overshoot on the upside more than they overshoot on the downside FICO overshot on the downside pretty severely I mean I think when I bought FICO I probably thought it was worth three or four times more than what I was paying or something you know but that means I think it's worth 60% less than one people are paying now you know so I mean it overshoots in both directions like it traded at 10 11 12 times free cash flow probably it was probably worth 30 or 40 it's probably still worth 30 or 40 you know what I mean I mean if we mean something that we buy and hold forever now if you mean trying to predict other things that's a different story that you could be in too early they would spent years I mean if you look there it's spent what is that um if we look back at what 2000 yeah you have it on that line is like the median or whatever I don't know what you have on that line but like 20 times basically or 21 times it shows um so it stayed for several years um in the 2000 you know I don't know 2008 to 2015 almost or something you probably could have kept owning it for a long time as almost a value stock then accelerate a lot more from them but people probably would have been a lot happier if they waited a few years to buy it you know and and have it go up rapidly then they would have felt a lot better than if they owned it for you know long periods of time um where you know it wasn't doing quite as well but the earnings per share growth was actually pretty strong back then cuz remember they were buying back the stock like we saw 6% the year or something so um yeah I look I I don't know I mean you can just we can look at that p ratio and see what happened recently and get an idea that a lot of that is just in the last two years or so so but it works and the same thing we see that sometimes with Schiller PE things where they're you know looking back at the past it seems easy to say oh it was too high or something but if it makes an all-time high in it which it basically has with the p ratio that means that at its previous all-time high it's gone up like 50 you know it's almost almost doubled in PE from what was almost like an all-time high before and people were probably saying it's too expensive at the all-time high before they'd look and say look it's never been this expensive in 30 years or it's rarely been this expensive and then it doubles from there mhm it's a good segue to uh a few emails that uh people had sent in so another question somebody had emailed in they want to know about your piece about how someone should invest with just one hour per day right he said it makes sense he said my only question is if someone adopts this Playbook how will they know what stock to sell when they find a new stock to buy assuming they're doing no maintenance work on existing portfolio Holdings it'll be challenging to know when to sell I wanted to get your thoughts I mean you'll have to spend some time thinking about what to sell um but it's shouldn't be that hard you just list what things you own and which you like best to which you like least all the time you know on a pad of paper or something it it depends on what kinds of things you own but if you own Buffet type things and you're reviewing them once a quarter you don't need to do more than that you know to know with you own those things that we talk about you know um Mo most all those things I mean most stocks that we talk about on the podcast you wouldn't need to revisit more than once a quarter um and then it's just go question of which do you like least and that's the thing that you sell first you know so basically to have a pecking order in your mind at all times about what you would sell if you had to sell something today now is that based on price or is it based on quality is that like okay I think the irr over this company could like over the next five years is 15% versus other one that's 20 and I also think it's a better business how do you think about that in your head uh I mean it has to be based on all those things so it has to be based on both you know price and quality basically um so so for instance you would sell something like f over was 100 times but you wouldn't if it was you know 20 times or something but then if two things were similarly priced but the quality was different than you know I mean we're talking about something that's very different well we've been talking about is something that's very different from say the buffet type approach or something but the approach of someone like Buffett is to say look it doesn't matter what the market Market puts values of stock at dayto day and I think that's the approach to use and so if that's the approach that you're using you're just saying there's a trade-off with price at a higher price means you have to get more from the stock in terms of growth and in terms of those things to make up for the higher price for over a longer holding period so then you can afford to hold it for a longer holding period it can grow into its price and it can still do okay for you if it makes up for that um so with the FICO example that I gave it's perfectly reasonable for want to think that at 30 times earnings um that it would get Market type returns or something it's hard to believe it at 90 times and it's really easy to believe it at 10 times or something so you know it's kind of like a horse race it's the odds you know you're not necessarily betting on the favorite you're betting on what has the best odds relative to what you think the real probabilities are MH how do you think BFF thinks about in his head yeah what he's most sure of is doing well enough um so I think we've seen that you know look what he's sold and what he hasn't sold right so he's selling Bank of America but isn't selling American Express selling Apple but isn't selling Coca-Cola you know so some of that may just be things he's own forever but some of that is also what things didn't get crazy expensive and so it's okay to hold on to them so things that he had a lot of certainty about but also the prices were pretty reasonable and then maybe to some extent things that got oversized Apple's a rare example of that but normally he wouldn't do that but maybe Apple got so oversized that he'd be willing to trim it which is not something you would normally do so that's the other thing for people to consider is you might have things that you want to trim if they get to be an unusual size of your portfolio and people make that decision based on how much diversification they want how many different stocks they want to own and everything um but so should you spend a couple hours you know on stocks you already own Maybe but I I don't know if you need to spend more than you know five hours a year what we're just talking about if you're spending about an hour a quarter or something on it if you have a few stocks you could spend a lot more time on it and that would be fine but if you want to own 30 stocks or something then it's going to be hard to do that I think that most people's time would be better spent mostly focusing on finding a really good new stock to buy and not so much worrying about selling the things they already own we just talked about stocks that are at really extreme prices that doesn't normally happen normally you could buy a f go hold it for 10 years and it never get to a ridiculous price you know so you make the right decision one time and it's okay and you don't have to worry about it I guess you can worry about things if they're in the triple digits and stuff you made all the right decisions but the price got too expensive you know then yeah you could worry about a bit more but for most things it's not going to matter that much and if you own 10 or 15 stocks you're not going to have to worry too much about that constantly evaluating you know price versus where they are now I think your time for most people who aren't like professionals would be better spent finding a really good new stock to buy than worrying too much about what they already own um just cuz you're already owned thing is always focused much more shortterm to be honest you've owned it for a while and so you're always looking at really shortterm what's the price now what was it before should I sell just like it creates too much action that you're doing just because things have changed a little bit because you know it so well and you kind of have a tendency not to be able to see the long term when you actually own it um you see too much of the period by period kind of results what about the thought process of what you don't own can't hurt you so if you do own something in the portfolio and and maybe is it just the nature of what you know the companies you focus on if you're buying high quality businesses they probably don't change as much asset growth or competition is probably a lot less than other companies I mean how do you think about that yeah I mean if you bought Cinemark and 150% or something then obviously yeah you should think about should I sell it have things changed a lot or have things changed because during covid or something I mean you know you want to use common sense about those things so obviously you would revisit things during Co about Airlines and movie theaters and whatever because suddenly there was this big change in the business that you weren't expecting um there's nothing wrong with you know selling something quickly after you buy it because the world's changed a lot or because the price is changed a lot so it's totally okay to quickly turn portfolio mhm to to toally turn over portfolio if like something like Co happens or if something like a stock goes up 100% or or something like that and the same would happen the other way there might be a stock that you think oh I'd really sell this and then it goes down a bunch and then it doesn't make sense to sell it you know for it to be the top thing that you would sell so I mean these are the idea is if you really only have like one hour a day that kind of thing which the idea of the topic was of this that is what the post title was if you hour a day yeah and the reason for saying 1 hour a day is because everyone should if they want to do this have one hour a day that you can do if I said you have to have 4 hours day then some people would say well then I can't invest my own money and everything but people can find one hour so yeah I do think that the vast majority of people that I've talked to would be really better off if they just worked really hard to find the next best new idea and the reason why they sold was simply to make room like if they just said I'm going to have a 12 stock portfolio or whatever and the way that they sold is that they really really wanted to own something new so they had to bump something off and that's how they decided to do it that would probably work better for more people than deciding I'll sell to hold cash or something and then you know and spending a lot of time selling a lot of people spend a lot of time thinking about the things they already own you know instead of finding new ideas so I I would discourage people who don't have a lot of time from doing that you know don't spend as much time worrying about the portfolio you already own spend a lot more time worrying about and finding something new that's really good if you only have an hour mhm if you have a lot more time though I would still spend a lot of time looking for new things but yeah you could spend some time reviewing your portfolio that way but I do find that most everybody has a much more short-term focus when looking at things they already own because they're just looking at the rates of change of they they know they forget how much they know and stays the same but a lot of things stay the same and when they find a stock for a first time ever they can take kind of a longer term view than something that they own and they're really worked up about how it's changed while they've owned it and they kind of see more change in it than really is it's a lot easier to look at the long term for something that you've never owned before you know I guess it also depends on the type of company you're investing in if you're investing in like a Costco or a Wing Stop or a FICO where again like it's not like a cyclical business you know where you're like okay there are Cycles to this and this thing will have you know more challenging times and you kind of want to pay attention to to capacity and all that other stuff I think it yeah I'm being very simplistic in this it would make a ton you might want to be looking every week at an Arbitrage situation spending hours on it yeah but that's CU things are changing all the time there's new information that really might move the stock you know you just have to kind of think that way how much how much really is there that could change about Costco other than big changes in the stock price from quarter to quarter other than very big changes in the stock price there's not a lot that should be making you decide to buy bu or sell you know agreed yeah so another question so if people listening want sending questions email me Android Focus compound.com somebody asked kind of more on what we were just talking about how do you think about valuing a cyclical business the traditional DCF mindset when valuing a cyclical is tougher because the numbers can be all over the place especially if I'm if I'm around the trough or the first few Innings of a new cycle should I simply think about what a business can earn at certain points in the psycho and throw multiple on it should I just buy below replacement value and wait for the cycle to change sometimes I feel like it's hard to put a numerical value on a business but I know that if I'm buying something at trough earnings or way below replacement value and I expect the industry to come back to life that can still be an interesting situation to invest in sort of like buffi ISM of not need to know someone's weight to know that they're fat do you agree with this how do you think about valuing cyal businesses after industry has gone through a downturn long question um yeah I think one it's going to be it's tough for people because it's always going to go way past what you're thinking you know not always but it'll probably go way past what you're talking about with like should I you know pick a earnings that I think it'll hit and throw a multiple on it for a cyclical business that could be way way off so you're going to have a number that's off for what it'll be a few years from now and so it end up that you think that you should sell at $10 and the stock goes to 30 some dollars but actually it does that on pretty low earnings the tough thing is that Peter Lynch type comment which is true that the cyclical business it may be expensive when it actually has a low PE and cheap when it has a high PE because the earnings are almost nothing at that point so that's going to mean that you should look at things like Book value you might also want to look at things like sales things that are different places in the um uh besides just looking at earnings for things that we can value commod type things on you know measuring the capacity and all that if you really understand that as well as other people in the industry which can be hard to make that evaluation then just appraising it on what that's worth might be a really good way to do it but you would also need to evaluate its financial situation and if the industry is going to go away you know you kind of have to say Okay this is an indust so you know take an extreme example like steel or something Steel's not going to go away so you would say okay am I sure this business is going to survive and then yes you could use like replacement value and things like that and there are people in the industry who know that kind of stuff and would say if you'd have more confidence if it was much cheaper to buy this business than to build what this business has I've mentioned that with supermarkets there's some where it's like they're pretty cheap compared to other things and it would be hard to replace what they have now you lease it and then use you spend a bunch of money and stuff but so I mean some of them own their real estate but it doesn't seem like it's quite the same thing but it would give you much more confidence if you say okay I think it always gives you more confidence if you say it's hard to bring in capacity that would be profitable at a lower price or something it's hard to replace that that you're getting something cheaper um but there are Industries where you might wonder well would anyone should anyone have ever bought this is it misplaced is its location bad for instance that' be the most obvious one it could be out of date technologically or other things but you know that the most obvious one would be like just not good location and this isn't where people would buil it today you know and then maybe it's not worth what it was originally bought for or built for what's the most cyclical business you've ever invested in ship building related probably okay yeah yeah mhm cuz a lot of to spend time there and is MHM yeah and I think there's times when they've been attractive I wouldn't rule out cyclical companies necessarily yeah it's the same thing we talked about before though you have to kind of apply a discount to cyclical companies versus other kinds of companies if their average earnings of the cycle are lower and people tend to overestimate that and think that they'll own pretty Aver it it's much easier to achieve your Returns on Capital goals at a much lower cyclical business than a higher cyclical business because the reason why business is highly cyclical is because there's some degree of miscalculation by some people in the industry otherwise you know it would be pretty efficient and they'd all figure out what they should be doing and there's no mismatches and these shortages and and everything would and happen in the industry so there's some misallocation of capital in a cyclical business to some extent but it could be in your favor at sometimes that there's not enough capital in it as there should be or something when you get it um so I I think we've brought up CLE businesses from time to time you know um but we brought up Seaboard or something in that was point it had like no earnings so that's why we would bring it up um I'm sure we brought up oil things or something like that at times where the price of oil wasn't particularly high or something so you know use common sense in those areas but the time to buy into something often might be when it doesn't have a lot of earning but it looks cheap versus assets yeah replace value you think industry is going to come back or that's why I like it I mean when they go through a downturn people just get hosed and so it's like if it's if capacity comes out or they scrap stuff then there's less of it and then when things finally start to turn um prices day rates whatever could be higher and everyone in the industry just been hates it those could be great opportunities there's also different kinds of cyclical businesses I guess I mean the big problem with some cyclical businesses is they only this is kind of the definition of a non-franchise business a true commodity business they will only earn high Returns on Capital in years of like a shortage of unusual things in the industry and that happens even in technology things that we've talked about semiconductor things where they can go through long periods where they don't have very good earnings it can happen with um what do we talk about AAR presses Metals is a good example something that like it doesn't sound as commodity like as something else but gives you the same idea where there's the tightness of Supply you saw that in some covid related things if you remember there were those like um protective gear type companies and things like that where okay so you can see what the longterm history is but you can always see that yeah if there's not if there's too much demand and not enough Supply in an industry then almost any business that doesn't sound like a great business can earn really high returns when we talk about what a great business is it's the ability to earn good returns even when there isn't some industrywide shortage all businesses are capable of like passing the magic formula in the right year for their industry if something strange happens and there's there's a shortage in the industry which can happen in basically any industry yes so you can see there they went through like a decade or something where their returns were you know mediocre and then they make all their profits in a period of a few years but if read about what the company is and what they do that's not that surprising you know um yeah I think the pitch with AAR is they've Consolidated they've acquired a bunch of other stuff so if there's ever that speculative boom or the industry is different they're going to benefit better from it or something like that yeah and something like this would just have a bigger balance sheet and be way Bigg we've done that with steel companies and things too they won't go back to where they were before their Returns on Capital could end up getting a lot closer to where they were before but they'll have so much more Capital that it'll still work out for you um you know they're not going to go back to the same earnings per share that they had some years ago but there's also just more Capital they're like their Book value and stuff will be a lot higher than ever was before you know yeah it's easier to to own the fos but it's more fun to own the the steel company shipping business yeah I mean uh Amar is back to almost one times Book value or something like it's not even at a premium to book right now I think is what says yeah and it's up a lot from where it was before so obviously Book value went up a lot we could check the key ratios to see that cuz I think it has tangible book there it'll give you an idea of what I mean that even if it goes down to where it was let's see yeah so if you look it went from T So tangible book you know I don't know if they issued Shar do they have per share Book value yeah they have per share Book value so it'll end up being about four times higher than where it was probably right tangible book not quite as much okay but you know so if it goes back to having the same returns that it had once before you'll still be doing a lot better because you have so much more Capital invest in the business if you owned it from back then um MH I mean I think those things for most people are easier if they own like you know if they can find 20 of them right because then they don't have to worry about it they just buy things that will make a lot of money if they ever have tight Supply because I mean at some point it would be hard to predict that it was going to happen you know in this case there's like a covid related thing that's not the only Factor but um it could be hard or you have to you know Discover it once it's happening um so I think it's hard for a lot of people because you could sit for years the same argument probably made sense in 2015 as 2020 with this company and so some people people were in it and doing well in a year and some people were sitting around for 5 years before it started to do well mhm I think the pitches is that like shipping companies or like Seaboard I mean whether this is true or not I think it those companies are harder to Value than probably like a FICO that's in like a Ste State yes yeah I I agree with that but then also that would make perfect sense but the weird thing about FICO right is the extremes yeah it overshoots like crazy that's be I don't know I think that's the theme though of just the market in 2024 2025 in general just the way that the market works now is that you're going to have extremes I mean think about that we talked about on the podcast but I listen to a podcast where guy worked at Citadel he said look if if we own something for eight months nine months and we were down on it or didn't move we cut it because momentum was such a big factor people selling or buying for just reasons that are so reflexive non-economical reasons basically and that's reflexive so that's why I think when people ask has Market become more efficient less efficient I think that's the answer is that you're just going to have more extremes of overshooting of undershooting and as an investor I think that's a pretty good opportunity for you you know yeah I do you think though that like 20 years ago there was some pretty big extremes too so I don't know how much of it is a you know back 25 years ago the.com and everything so I mean you know let's see how far do these charts go back they go as far as you want them to go okay so if you pull up like micro strategy is a good micro strategy is that what I mean yeah try that one the Bitcoin one all right well yes bonds by Bitcoin basic a bet on bitcoin going up forever well but that's not what it's always been it's whole history and if you go all time I think you'll see something here go back that far no it doesn't go back that far yeah it does okay all right so you can barely see that on the chart then but it was once at a very high price there you go that chart's good yeah so it you know it took 20 years to get back to the price that it was at in the 200000 boom so you know these things do happen um you know FICO we couldn't quite find something as extreme in its past you know but we did have a point where it was really cheap so it's easier to come up with that where you can't find another example in the past 20 years tell something like that happened it's rare for it to happen in the exact same stock like this that's unusual uh Nvidia I mean it's so much bigger company now than it was then but you know something like that you can find examples where had a really high P multiple or a high whatever and then didn't for decades and then did again um so I I really don't know it's hard to say things got a little crazy in the 1920s and some stocks they they got crazy in 2000 so I don't think it's like a completely new thing um I think the biggest issue has been the length of time for people but you know it outside of Co and some other things I don't know how tight Financial conditions and stuff have been all that often so I don't know how hard things have been tested there there've been a lot of months of some expansion in the economy and everything so I think it's just more an issue of like the consistency of it rather than the extremes it we did cover some extreme stocks but been extreme things before too I just feel like the length of time that it's lasted is more like when we talk about Fang or something like that is more people saying this has worked for years and years you know got it cool well I want to thank everybody so much for tuning in with the both of us on the focused compounding podcast if you have a question you would like for us to go over email to me at Andrew Focus compounding tocom if you're watching us on YouTube make sure hit the Subscribe button you will be notified whenever we upload a new podcast and of course if you're interested in learning about our Money Management Services you can reach out to me at Andrew Focus compounding docomo much for all the support and we will see you in the next podcast take care