Jonathan Tepper - Buying Monopolies at Prevatt Capital (EP.375)

23:21You just don't ship these things hundreds of miles. And so if you have the quarry, you'll have that local monopoly. The problem is, of course, it's relatively capital intensive. It's relatively cyclical. And then as has happened in recent years, you do have merger waves in the cement industry. And so you then end up with a highly capital intensive cyclical industry with loads of debt. And so it's deeply unattractive, except at perhaps bottom points in the cycle. When you start narrowing it down, it gets narrowed down a little bit further, but that's the area that we've mapped out. You talked last time we had on the show about a natural monopoly.

23:52How did you decide which ones you wanted efficient? If you read an economics textbook, they talk about natural monopolies, which would be things like power utilities, water utilities, and it makes no sense to lay down two sets of pipes or two sets of copper wires. You tend to have one company and then to make sure that the consumer doesn't get gouged, you have a regulated rate of return and the regulator sets that. Those are natural monopolies. I think of natural monopoly a little broader, which is to say, does the delivery of the product dictate that there be few players? Going back to the financial exchanges, you don't want to be transacting on dozens of exchanges.

24:22You want the highest amount of liquidity and that's why you end up with one exchange that does one contract. That has a natural reason for existing, and that's what I call natural monopoly, which is much broader than the economics textbook. The unnatural monopolies, I think, are pernicious and bad for consumers. Those are essentially ones where absent excessive regulation or mergers to monopoly, you would have competition. My entire book was written against these, where the regulators and antitrust have allowed all sorts of mergers that should never have happened. Then there's excessive regulation.

24:52I talked about the McCarran-Ferguson Act with insurance, where you can't sell insurance contracts across state lines. And so the US spends more on healthcare and medicine than almost any other country with worse outcomes, because you have some states with two insurers having about 90 % market share. Some like Moody's or S &P, where to get an NRSRO designation, if you don't have it, you can't rate. But Altman, Z-Score, KMV, distance default, we could have algorithms rating stuff. It's just crazy to think that these exist, but it's because of law. How do you think about investing in that type of monopoly where it's law that's created this unnatural situation where it could be good today, but it could change in the future?

25:31We don't invest. And I think that these are not great companies and people often tout some of these. And you have some like Transdime, for example, which relies on FAA certification and are pretty open about they triple the pricing when they purchase a little part and they raise prices over 6 % per year, regardless of what the underlying cost of producing the part is. Obviously, it's provided a good return to investors, but I think that's slightly parasitic. What we're trying to do is to find companies that add value to clients and that have a natural reason for existing. That steady demand from customers creates the cash flow, which rewards the investor.

26:02How do you think about the other case of the large technology companies where there have been mergers that you could say maybe they shouldn't have happened, but today they command such a huge market share and there's always the risk of something breaking that up? That's a major problem for bad monopolies or monopolies through merger is that eventually they can either be undone or regulation might be passed to make sure that they don't capture those excessive profits. And it's quite interesting. I reviewed an enormous amount of academic literature on monopolies and returns, and many of them show that you do get higher returns, but some studies show that you don't.

26:36And partly is that if you're buying, let's say, a pure play, you're getting an undiversifiable risk. And to the extent that you have supernormal profits with a pure play, when that turns against you, the money that you make on the rate card or your profit margin goes down tremendously. While technological obsolescence or changes to an industry are present in any investment, They're certainly more present if you're overpaying for something that might change radically. Once you've mapped out this landscape, how do you do your homework on the companies that you potentially want to invest in? We have four analysts plus myself, so five at the firm.

27:09Arguably, we might be overstaffed relative to our assets, which are approaching$450 million. But we don't have to hire more as we get bigger. I thought it was important to have the full team before we had whatever assets might justify having this great team of analysts. But we will spend months on industries and companies. We'll map out the value chains and profit pools in great depth. We'll go away and read half a dozen books on any industry. I'll go away and read hundreds of news articles, obviously read all the financial filings, whether they're SEC or other regulatory agencies that companies often have to file with.

27:41We will do our write-ups on the industry, write-ups on the company, and then we'll start talking to management once we feel that we have a good grasp of exactly what's going on. Management is critical. It's interesting. My parents did social work. And once I met a great investor who's essentially unknown, but with a terrific track record. And he told me, he said, well, I'm in the business of social work. And I thought this was a little shocking. He's clearly an enormous moneymaker. And he said, ultimately, investment funds and companies are groups of people. And they're motivated by a vision. They're motivated by a leader.

28:10And that's why I think it's critical to understand who is managing the capital allocation and the money of the shareholder. And so you can write the best write-up you want, make the most amazing model that's accurate down to the penny. But if management goes out and blows all their cash on a terrible acquisition, they just destroyed a tremendous amount of value. So getting to know the people who hold the purse strings and have the vision for what the company is doing is critical. Once you've decided that something is a candidate, how do you decide when you put something in the portfolio? What we're really trying to do, and I think all value investing ultimately is trying to do, is to buy a company below its intrinsic value.

28:46And so there are two ways that we try to approach this problem. A starting point is looking within our database at what's down the most over the last year. And it may be perfectly well-priced today. Maybe it was egregiously priced a year ago. But often it's telling us that people are overreacting to some short-term news. And if we can become comfortable that it's a temporary phenomenon. And so when the fund launched in May 2020, the bottom in the market was in March. But people were still very fearful of COVID and no one was traveling. And so we felt that we were able to buy booking close to a 10 % normalized free cash flow yield with a terrific CEO, Glenn Fogel.

29:19That was an example of finding these things that are down an enormous amount where we think people will travel again. Humans want to travel. Travel has tended to grow at a GDP plus rate and booking can do so at attractive returns on capital and high free cash flow margins. The other way to do it is sometimes great companies don't sell off that much. And that actually I would say is probably the norm for high quality companies is you don't tend to get too many opportunities to buy them cheaply. But there we have back of the envelope calculations for all of these companies. And then we can see what has the biggest discount to our back of the envelope calculation.

29:50And then we'll start doing a lot more digging to see, is that at a big discount? Once you've decided that a business that you want to own is in this privileged position and you like the management team and you get a reasonable enough price, what do you do in your ongoing diligence that might change that thesis? This has happened with a couple of companies that we've owned. Sometimes we've misjudged management. So we did own a financial exchange and then they went out and spent half a billion dollars on a crypto exchange. And they surprisingly wrote down the acquisition the same quarter that they made it.

30:23To me, that was a spectacular misuse of capital. You wouldn't be writing it down if it had value. And then furthermore, if the crypto is an extraordinary place to invest, and I'll leave that to the listeners to decide, but why would they not decide to build this themselves? Which also makes me question the use of cash. So often we've had unpleasant surprises like that where management, you think you have a good sense and they might tell you one thing on the call, certainly when you're talking to them, that doesn't really fit what they do later. What are some of the other things that you've seen that caused you to change your mind?

30:54One of my favorite books is The Curse of the Mogul. It's just a terrific read on media. It was written by a former Goldman banker who was teaching finance. And he was pointing out that media itself tends to lead towards uneconomic decision-making, which is to say that whether it's the arts or music can't be judged on financial metrics. And so therefore, a lot of capital gets destroyed in pursuit of acquisitions and growth. And we did buy a media company where the CEO, as it turned out in the conference calls, was much more interested in expanding that empire. And then I was kicking myself thinking, I tell all the analysts to go read The Curse of the Mobile, and then I'm ignoring it briefly.

31:26What does your portfolio look like at any point in time? We want to be very concentrated, so 10 to 20 stocks, but we've really averaged sort of 16 over the life of the fund. And part of that is that if you have too many stocks and one doubles, let's say you own 50, it's doing very little for your overall rate of return. And if you have 20 stocks, on the other hand, and one doubles, it can meaningfully contribute to your yearly return. And we like also to feel that we know our companies very well. And I think it's much easier to do that with a smaller number of stocks than it is with too many. So we have about 16 stocks.

31:57And then we're trying to do something paradoxical, which is we want maximum concentration, but we also want maximum diversification. And some funds are essentially agnostic as to what industries they might invest in. I think it's important to have some industry diversification and some geographic diversification, not by listing, but by the source of the revenue. I've seen many funds, for example, that are almost entirely consumer staples in the quality space or entirely tech in quality or growth. And ultimately, you're basically making a bet on the NASDAQ or on the consumer staples and allocators want to pay for alpha, not beta.

32:30And if you can replicate that factor that they're essentially exposing themselves to an underlying basis, it makes very little sense. So I think that having some diversification by industry and geography is critical to make sure that you're not getting carried away with any one factor and providing you with multiple streams of potential returns rather than just one. How do you think about position sizing? We rarely start with the absolute position size that we might want only because often we're buying things that for short-term reasons are either unliked and might go down further. And if you've already put on the full position size, you can't buy more.

33:03We always want to be able to buy more. It's a terrific book called The Art of Execution written by a man who ran a fund of funds. And he went and looked through his own managers, which ones did well. And the ones that did well were ones that when stocks went down, cut them or added to them. But if you do nothing at all, you're going to get worse returns. We will only double down once. If you start doing more than that, you're essentially following the Martingale strategy, which is also known as gambler's ruin. And it's always the house that wins, not the gambler. And so we want to make sure that we can thoughtfully add.

33:32And we've done that during COVID. Travel had some trouble. For example, 22, Russia invaded Ukraine and interest rates were going up. Oil was going up. A lot of high quality European names were on sale and we didn't buy the exact bottom. And so being able to have the ability to buy more was very advantageous in terms of the ultimate IRR for these positions. In addition to buying more on the dip, how do you think about ads and trims along the way? Our median size has been about 6 % per position. Some positions have been larger. Partly, they've had slightly higher IRRs and we wanted to allocate more capital to them, but also they performed tremendously well.

34:06And so they've ended up reaching 14, 15 % of the portfolio. And it's not even, it's not like every stock's going up that much. Obviously, they wouldn't get that big relative to the other positions, but I do think returns tend to have a create a distribution. And I think as a manager, if you immediately start trimming a winner, you're going to have worse returns, just mathematically. We do have tolerance for having a few larger positions as they perform. But the one thing that we're trying to do is to not overtrade, we trade very little, is to optimize the portfolio, which is rather than if money comes in the beginning of the month, add pro rata across the board, we have an internal IRR for each stock that we calculate.

34:42Now, I'm sure that we're getting that wrong, but at least it's a useful exercise to go through. And we try to allocate the most capital to the ones with the highest expected IRR. What are some of the names or industries or areas where you found something attractive that you think the general universe of investors don't see as attractive as you do? I started looking at a lot of the quality funds just to see one, what's out there, what are allocators investing in? And it's always good to know your competition. Often we'll see companies that they might own, and then we'll see who the holders are.

35:12I found that basically you can explain most quality funds with three sectors. So they're running essentially tech, consumer staples with some healthcare. And it's a barbell strategy generally between tech and consumer staples, which provides it quite a lot of stability. But you can basically buy XLP, XLK, and XLV at 15 bibs and replicate with about 95 % correlation, a lot of these quality funds. So there are other industries outside of those three that are very interesting. And we don't restrict ourselves to those three. For example, we own Norbremse, which is a German rail brakes company. And globally, it's basically for the last century been a duopoly between Wabtec in the US and Norbremse in Germany producing rail brakes.

35:50And there's reasons why entry into the industry is very difficult. These are absolutely mission critical pieces and you don't want rail crashes. In China, they had produced some of their own and then ended up tightening the rules on that. So there's a reason why there are two companies that do this very well and have done so for a long time. And And then you have long-lived contracts where you don't swap out your breaks for quite some time. What do the economics of a business like that look like? Their returns on capital have been in the high teens over the last decade. They have one controlling family.

36:19The shareholder died and his kids have been there. They were about to do a bad acquisition. Didn't go through. Thank God. They've replaced the CEO. But broadly, you're dealing with slightly below 15 % operating margins and high teens returns on capital. And this is a business that is an industrial business. It's not to say that it doesn't have any cyclicality, but I do think that having a slightly lumpier but higher earnings per share, free cash flow per share is better than having a very stable lower one. And I think there's a preference often to have these very stable ones and to avoid anything that's slightly cyclical.

36:51You mentioned in that example, a CEO who almost did an acquisition that you didn't like. How did you manage your position through that period of time until the CEO got replaced? Well, that predated our involvement and the new one certainly doesn't appear to want to make any ill thought out acquisitions. But this is a problem that I think affects almost all investors. And Chris Hennon, I was just trying to get Airbus not to make a cybersecurity one for political reasons in France. I think it's something that investors have to be very wary of. Generally, either transformative acquisitions or totally unrelated acquisitions tend to destroy value.

37:23And I think that it's best to find companies that can reinvest in their own business at incremental rates and do well. So having a long runway for growth. What are some of the other examples of things that you'd like that you think other people that invest in the space might not pay attention to? One area that we really like is food distribution. I mentioned booking and the idea of middlemen who are providing tremendous value to the supplier and to the consumer. And so middlemen perform a function that provides economies of scope. So people tend to think about economies of scale, where you have ASML with an enormous amount of sunk R &D costs into the machines, or you have Boeing, where you have a global do Apple in airplanes because it's extremely capital intensive.

38:03Whereas the middlemen, interestingly, quite often are relatively capital light. And then they tend to have tons of producers on one side and tons of consumers on the other, and you'd almost have to invent them. And so we like food distribution in part because restaurants could have 50 suppliers bringing them ingredients every day. It doesn't make a lot of sense. They want one truck showing up, giving them their ingredients. Those are very high-end restaurants. It might be a little different. People want to pay up for ingredients that come from far away. Broadly, this is an industry that provides tremendous value to smaller restaurants.

38:32And then you obviously have all the people producing the food and the ingredients and things like that, that don't want to have 20 ,000 or 10 ,000 restaurants as customers. And so the middleman role is essential. How do you work with your team? And in particular, your brother David has joined you from the beginning. And sometimes people look at that as not a good thing to have a sibling working with you. I suspect that a lot of that came from the Madoff fraud, where obviously you had an entire family and brothers working together. But I think it's ironic that if you look at academic research, family-run owner-operator businesses tend to outperform.

39:07And if you look historically at banks and brokerages, they tended to be family-run and even investment funds like the Davis funds. Family, I think, can be a very strong thing where it gives you a longer timeframe to look at it. You're working with people you trust. And so it's now turned into a bad thing in the investing industry when we're actually trying to go find companies that have this stability. So I think it's a little strange, but my brother, David, he's a genius. He taught himself calculus and trigonometry on his own in his early teens. And then he graduated high science mathematics and had a degree in accounting, worked for Arthur Anderson.

39:37And then interestingly, spent a couple of years working with my parents running businesses. The drug rehab center is totally free. I know all my friends were running businesses. My brothers and I used to work in them. So my brothers run and operated businesses. And he and I have just talked about investing for two decades together. He's much more of a long-term buy and hold investor. He's held positions for 20 years. I can't claim to have owned any stock for 20 years. I'm long-term, but not that long-term. And so I thought it would just be terrific to work with someone who I rate their intellect, know their character, and he knows his accounting inside out.

40:08And it's just a terrific partner to work with. How does that work alongside the rest of the people on the team? What I try to do is to insulate the analysts from any involvement with the operational side of the business, which is I want them looking at stocks and looking at industries. I also want them to have the freedom to spend two, three months on an industry and company. With the team, we have multiple meetings a week that are brief. We'll update each other on our work. They don't have to produce a report or an email or anything on a weekly basis. And then when they do produce it, it's very high quality.

40:37And one thing that we try to do is to share the write-ups and the industry work and even thought pieces on themes, whether it's the role of a middleman or other ones we've worked on with investors. We know that our allocators who've invested in us as family offices and endowments are not trying to front run us or to double down on positions. And I think a competitive advantage of a fund is to have great LPs. And if you have LPs who have a long timeframe in mind, then you can do long-term investing in the fund. If you have LPs who have a short timeframe in mind, there's no way that you're going to succeed as a manager doing long-term investing.

41:13What have you learned about being a portfolio manager now a couple of years in that you didn't realize you needed to know when you started? One of the main things is obviously if you're an analyst, you tend to fall in love with individual positions. You don't tend to think holistically about how do all these positions fit in together. And just because something is a terrific bargain today, it doesn't mean that it's the best thing that you could possibly buy because can you keep on adding capital to it over time, particularly in a fund like ours that's growing. And so you have to be able to buy positions that you think you can consistently add capital to, not just that you had that great one-off mispricing on that one day, and then there's not either the liquidity to do it or that mispricing closes so quickly that you can't add more capital to it.

41:53Because we try to be pretty disciplined about having less than 20 positions. That's one. And Stuart Roden of Lansdowne said that good analysts don't tend to make good portfolio managers because of not seeing how the portfolio gets put together and how to manage adding and taking off positions relative to falling in love with your idea. Where have you made mistakes? I think misjudging management has been one, certainly. And CBOE, which is the Chicago Board of Options Exchange, as it turns out, I view that as a mistake, even though the stock went up after we sold it. You could say that we left money on the table.

42:22But in my view, misjudging management and capital allocation was a critical one. We had owned Meta, which falls into the sort of media advertising company, which I was referring to earlier. bought it when it had reached about$130, it was about 10 % free cash flow yield. I remember on the call, Mark Zuckerberg was saying that there'd be no free cash flow that quarter, no free cash flow the next year. And I think it was probably out of a sense of personal embarrassment watching his stock collapse that he then decided to cut back spending on Meta. And basically the next year became a year of right sizing and so on.

42:51Maybe my mistake was not buying back in, but I realized at that stage when you have shareholders and a founder at Meta who owned 14 % of the shares and exercised over 51 % of the control, this is very definitely the Curse of the Mogul where you have the multi-voting shares. It was probably best to leave meta to other people. And I'm thrilled that other friends I have made a lot of money. Being in a relationship with a CEO who has outsized control relative to their shares is generally not a good idea. Where are some other areas of, let's call it opportunity cost or things that you could have or close to buying and chose not to?

43:24There've been quite a few of those. One of our analysts and I spent months and months on the semiconductor industry. The industry has become much more concentrated, primarily due to technological complexity, and in some cases, capital intensity. And we spent an enormous amount of time working on it. We did not buy late in 2022. Obviously, that's had a terrific run since. And part of that was that we'd written a 30-page paper looking at previous semicycles and looking at what you end up seeing in terms of book-to-bill ratios, supply coming online. And so we thought, this is not the right moment to buy.

43:57It will go lower and we'll have the opportunity here and we've done the work. Now, of course, they just took off like a rocket. Many of these have doubled and more than doubled. I think there's an element of hype in some of them. And the valuations today are certainly not at all attractive relative to the fundamentals in many cases. So that's an area where other people have made money and we've not. But I think that it's an absolute sin to lose money for investors. I'd far prefer to have a lower return not losing money than I would to flail about and punish myself for having missed an opportunity that produced great returns.

44:27I think if we can take care of the losers, the winners will take care of themselves. So alongside this development of your investment strategy, you've had to build a business and you've gone from just starting it with nothing to half a billion dollars after a couple of years. I'd love to hear some of what that path has been like and lessons learned along the way. When we started, it was a much smaller team. We've grown quite a lot, particularly in the last two years. And I think one of the important things is finding high talent and high agreeableness. Generally, these two don't go together. And I was very fortunate to be able to work with Simon Batten, who's worked for the last three decades running funds.

45:04Lately, he started his own firm, Hermine, but he'd been at Eclectica, previously Odie. And he's extraordinarily competent, one of the most agreeable people I know. I can't remember having a conflict with him that we can't talk about and resolve within five or 10 minutes. And so having him take over a hundred percent of all essentially financial, legal, admin, regulatory has been just a terrific boon for me because when we started the fund, I was still doing a little bit too much of that. And I think that's inevitable unless you're doing a large start where you come from a previous manager, where you've got your track record and can start with an enormous amount of capital.

45:35To me, that was a big lesson and it's great. And I'm so glad that Simon's on board and then just trying to build a team. And I think the other thing is finding great mentors. I listened to your podcast every week and being able to talk to you as a friend. You've always been there basically when I've had questions. There are many great investors who are essentially unknown to the wider audience and want to stay that way. And they know who they are. And I'm extremely grateful to them for having lunch with me whenever I go through New York or London. They know how grateful I am, but just having those really helps on the business side.

46:01How have you found the path of raising capital? The best way to look at endowments and large investors, these are like oil tankers. They just move slowly. They have their own internal strategy. They have their own internal allocations. This is not something that happens overnight. It's natural that they want to see a manager do well. And then they have to get to know you. We have to get to know them. And so I think that most things in life are a marathon, not a sprint. And so I hope that I can have good health and do this for the next 40, 50 years. And I think that investing is one of the few lucky professions where you don't have to retire due to physical aches and pains of your job at the age of 40 or 50, or even be forced out in your mid-60s.

46:41Buffett, Munger, and Templeton, we're doing it in their 90s. I hope I can do that. I think that looking at investors, if I want to have a long-term approach for my business, certainly they have one for theirs. And so I'm not in a rush and just trying to make sure that they get to know us. How do you look at your longer-term objectives for this business and what it means for your life? One, I enjoy what I do tremendously, which is every day there's something new and interesting in terms of reading books, articles, looking at companies. I think it's a deeply engaging pursuit intellectually investing.

47:10Also, because I think investing itself is agreeable, I want to work with agreeable people. So having a team of great people that I love is important. And I think that we've really lucked out with our analysts in terms of the character and the quality that they have. But as a business, what I'd love to do is to close the fund to outside investors, focus on long-term capital-weighted returns, not just time-weighted returns. One of my favorite books is The Hedge Fund Mirage by Simon Lack. And he points out that many funds destroy dollar value because you put up great returns on low capital. You get too much capital, produce poor returns, shut.

47:43And the investors essentially net have lost money and the manager is very rich. And I think that's a terrible thing. And I would be deeply embarrassed if anything like that happened. And I also think that we're not in the business to fundraise or gather assets and live off the management view. We're in the business to try to put up good returns and making sure that we have the right size is critical. So if we circle back to where we started, you are in the early stages of raising a family. And I'd just love to hear, based on your own experience as a kid, how you think about being a parent and raising your kids.

48:14My mother passed away in 2012, and she ran the drug center with my father. My father's 77, still working. And I think he'll die working because he loves what he does and probably the way he wants to go out. One thing that my mother always told me as we related to the addicts was the answer to life's problems is almost always more love. And I think that if children can grow up in a loving environment, and even within firms, if you can provide an environment where people feel loved and supported, you're going to get a lot more out of them than having other rewards or punishments. I hope I can be as good a parent to my own children as I think my parents were to me.

48:47Jonathan, I want to ask you a couple of closing questions that I didn't ask you the last time around. What is one fact that most people don't know about you? And let's say in addition to your background? Probably the strangest anecdote that makes my friends laugh is two strange things. One is I can do a handstand from Lotus position, which I ended up doing in a job interview with Dan Lowe when he asked me that question. And then the other one is I love languages and I ended up spending my time reading a lot of books in old Spanish when I was a kid. So when I got to college, I'd read an article about Ladino, which was 15th century Spanish mixed with Hebrew when Spaniards kicked the Jews out in 1492.

49:23Many kept on speaking it. And there's so many people today who speak Spanish. Families haven't been there for 500 years. And so I got a fellowship to go to Israel and learn Ladina. Which two people have had the biggest impact on your professional life? That's a tough question because there's so many wonderful people. But one, Adil Qabani, he was a Rhodes Scholar with me. And he's just an absolutely stellar person as a human being, and also a phenomenal fund manager. And you might be annoyed that I'm outing him and talking about him. I think there's only his article online when he got the Rhodes, when he got married, and when he launched this fund.

49:51And then deeply grateful to Paul Marshall, who was a client at variant perception and been tremendously supportive to me as the fund is launched. What are the things you learned most from them? From a deal, the only thing that really matters is performance. If you go to his website, it's got his Park Avenue address and an email. He knows the institutions invest in him. They know him. He does extraordinarily deep work and he's just always doing interesting things that are slightly off the beaten path. And I do think that execution is the only thing that matters and putting up returns and having a great relationship with the LP.

50:20So he's a real model in that way. with Paul. I think everyone in the investment industry generally has to start somewhere. And he's just been so helpful to us as we started. And obviously, we don't invest the same way. We don't have the resources or the PMs that Marshall Waste does. But ultimately, investing really is about buying quality things at a fair, if not very attractive price and avoiding, if not shorting, things that are bad. And that we share a very similar philosophy. And then his book, 10 and a Half Lessons, I think is terrific. And you had him on your show and he talked about it.

50:50I think that's a must-read book and very much from the portfolio manners approach, which is managing risk and position sizing rather than just do you like that individual idea. One last one. What's the best advice you've ever received? That one's very tough, not least because I'm so grateful. People have provided a lot of good advice. So one of them, interestingly, was my best friend, Turi. I was talking to him about my plans for the fund and what I wanted to do and these great investors and Templeton and Buffett and Chris Hound and others. And he said, Jonathan, he said, you do you. And I've realized that ultimately one part of growing up as a human being is you have to learn from your parents, but ultimately we are ourselves.

51:26And part of growing up figuratively is abandoning the parents and being willing to be ourselves. And I think professionally, everyone has to learn, the world moves on. And I think if all we did was slavishly copy our mentors or even great figures who've read books about, we wouldn't grow very much. Jonathan, thanks so much for sharing your incredible personal story and this step in your professional journey. Thank you so much for having me, Ted. Thanks for listening to the show. To learn more, hop on our website at capitalallocators.com, where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more.

52:07Have a good one and see you next time.

52:16Thank you.