Matt Miller – Crossing the Energy Divide at Grey Rock (EP.412)

24:51It was down 10%. So that coupled with the emerging world wants to be like the lucky 1 billion of us that are energy rich. The contra of the supply problem is a sticky demand problem. And that looks like if you took your average African citizen and gave them 80 % less oil than you and I use, you would consider this camping, by the way. That would increase global oil demand by 30%. So that's three times the COVID effect. That's the challenge on the traditional energy side. And I walk folks through that. This is where I say the second big overarching thesis here is the drumbeat of carbon is only going to get louder.

25:29Currently, Republicans under the age of 35, 80 % of them say climate should be in our top five list of policy issues. Nobody talks about that. That means that the United States is quickly headed to a super majority climate position on policy. Carbon will be a commodity that rivals oil and gas in scope and scale. And you need to be ready for that. Buddies in West Texas that say CO2 is food for trees, full stop. And then I have a lot more evangelist folks on, I'll pick on San Francisco here, who say, we need to stop all fossil fuel production tomorrow in order to solve it. What I try to do is I try to help folks to this centrist position on energy to say, both are important to try to achieve simultaneously.

26:13As you looked at supply-demand characteristics of different environmentally friendly ways of investing as you were going down the path to where you ended up with carbon emissions, What are some of the simple math equations that led you to pass on wind or solar or some of the other projects that you see? Let's start with renewables. Renewables are overcapitalized, and it's not even close. It's massively overcapitalized. When you look at areas where renewables are built, you're not creating too much electricity. You're creating too much electricity at a certain time. They are time-delimited electrons.

26:50So some specific examples are power prices in Western Oklahoma are negative 20 % of the time today. They will pay you to take the power. What in the world? That doesn't sound right. Well, if you think about it this way, hey, I'm a Google or I'm a Meta and I want to be 100 % renewable power, but my data center might sit in Illinois next to a coal plant. I'll finance a wind farm in Oklahoma with renewable energy credits or something along those lines. I've cleaned up my power, even though I didn't use those electrons. Not a lot of folks are moving to Western Oklahoma. So there's nobody actually in terms of a demand or load sink for those electrons.

27:28And the federal government says, hey, I'll pay you$10 if you produce a renewable electron and somebody uses it. Well, if there's nobody to use it, then Matt pays Ted$5. I get 10 from the government, so I'll pay you five, just find some use for this electron. And it creates negative prices, which is really weird. That happens at high noon in California as well. So that's where I say renewables are a phenomenal thing in an energy portfolio. When you push renewables to try to be 100 % of the ecosystem, that's where you create problems. And then folks might say, well, that's really simple. Just use a battery.

27:59A battery is a sponge for these excess electrons, and it can grab them and then resell them, and that's perfect. Well, taken to an extreme, we did some math on Germany, for example. Germany's trying to push an energy Vende policy that's effectively heavily only renewables. And the back of the envelope math says, well, in order for Germany to be 100 % renewables plus 100 % battery, the battery piece of that equation was$270 trillion. I don't think people understand how large the energy ecosystem actually is because it sounds good in a soundbite, but in actual dollars, these things are massive investments.

28:34So that's some of the stuff that we do is we look at, okay, what's the logical extent of this ecosystem? Sustainable aviation fuel, another example, are people willing to pay a premium for an airplane ticket? Well, depends. They are if it's 1 % of your airplane ticket. They're not if it's 100 % of your airplane ticket. So we try to think through these ecosystems. And then what we really found was that carbon capture was largely being ignored. It had gotten a bad rap. What I tell investors is saying you do carbon capture is like saying I do real estate. Okay. Are you industrial outside of Dallas, Fort Worth?

29:06Are you building one of these super high skyscrapers on Central Park? Are you hotels? There are just so many ways to do it. And what we saw was if you focused your investments on the right style of emitter, you can actually make private equity returns. So typically when you read an article that says, we've tried carbon capture, it doesn't work. These doofuses in Texas just don't understand how the world works. Typically they're pointing to one coal-fired power plant. It's the Petronova plant in Texas. Decarbonizing coal is where humanity wants to go with carbon capture. And I agree with that. I think that's a phenomenal thing.

29:40Now, that being said, when I burn coal for power, I emit CO2, but I emit mainly other stuff. The CO2 in the emission stream of a coal-fired power plant is only about 10 % CO2. Ambient air is like 80 % nitrogen. What does that mean? It means at the tail end of a coal plant, I could have put a very special sponge, either a sorbent or a solvent. That's typically in the billions of dollars just for that sponge. It's high on CapEx, it's high on OpEx. It means downtime for the plant because it's technically complex as well. Really where you want to focus in carbon capture are in industries that emit pure CO2 as an industrial byproduct.

30:17Industrial accident is a better way to think about it. So those are really ethanol plants, ammonia, so fertilizer, and then natural gas processing. Those are the industries where this is applicable in the immediate term and can make private equity returns. It tends to be pretty nuanced. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past? Partner with a company that's been defining the future of dealmaking for nearly two decades instead. When it comes to M &A innovation, SRS Aquium has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches.

31:00professional shareholder representation, online M &A payments, digital stockholder solicitation. SRS Aquium pioneered each and continues to set the bar for game-changing innovation. So leave the days of disjointed deal management behind and define your future with SRS Aquium, the smartest way to run a deal. Learn more at srsaquium.com. That's S-R-S-A-C-U-M. P-Q-U-I-O-M.com. And now, back to the show. So we take it to a higher level of what the case is on carbon capture. What are the characteristics that make carbon capture something that's attractive as an investor? It starts with the purity of CO2 emissions.

31:50There's three component pieces of carbon capture, capturing the CO2, transporting the CO2 through a pipeline, and sequestering it. So drilling an injection well and getting rid of that CO2. What is a variable that we really look at is this transport piece. That pipe is super expensive. What we're trying to do is sequester the CO2 that comes out of a plant gate as close to that plant gate as possible. The idea here is it reduces CAPEX for pipeline transport. It also reduces the number of stakeholders you have. So those are the component pieces. And then you have to have an emitter who's aligned with you.

32:23So those are the component pieces of what makes a good project. I guess that might be a good time to hit on. Who pays you to do this? How in the heck do you make money doing carbon capture? And it's actually through a tax credit. Tax credit's got a really weird name. It's called 45Q. Really what that tax credit says is, hey, if Ted goes out and he takes one ton of carbon dioxide gas and he injects it into the earth, permanently getting rid of it, we'll pay him$85 per ton that he does via tax credit for a period of 12 years. This is an old tax credit. This thing was created under George W. Bush at$20 a ton.

32:57Too low of a price to really do anything with. It got increased in price again,$50 a ton. Under Donald Trump. I don't think either one of those gentlemen have a brandishing of the environmental movement in terms of today's politics. And then it got enhanced again under Biden and Manchin at$85 a ton. So that's really how you make money doing carbon capture. The vast majority of the economics are on the basis of that tax credit. So walk me through how you lay out the risk reward of the investment opportunity. So you're putting in this pipe that helps you extract carbon. You're going to get a tax credit from the government for it.

33:31How do you think about money in, money out? A good project in carbon capture might be an unlevered 20 to 30 % rate of return might be somewhere around three to six times your money. These are competitive with traditional private equity economics. The weird thing about 45Q is it's not a supply demand thing. It's$85 a ton. If one plant gets built, it's$85 a ton. If 1 ,000 plants get built, it's$85 a ton. And it goes up with CPI. I like to say in the energy transition, we've all become government contractors. We're all working for the DOD because the only folks that have deep enough pockets to do this at scale are governments.

34:07For some sense of scale, the voluntary carbon market. So you're Microsoft and you go out and you say, hey, I'm going to buy X tons for saving this rainforest and offset our corporate emissions. That global market is about$3 billion a year. For some sense of scale of how big the IRA is, the IRA is about a trillion dollars. It is a tactical nuclear weapon against the energy transition. That's why you're seeing very large firms in red states having very large investment programs against this. So that looks like Duke and Dominion and DTE and Southern Company and Exxon and Chevron and Shell and Air Liquide and CF and Nutrien and Koch Industries and Little old gray rock.

34:46When you talk about project economics, our mission from our partners is you have a material impact on carbon, but you're delivering returns to me that are competitive with my traditional private equity portfolio. I'm not a charity. That's actually a complicated part of the energy transition because there is charitable capital out there. Bill Gates doesn't need to make a return. It is a difficult thing to swim through. Again, it's focused on these full cycle returns. What are the complexities of the operations of making this work? let's start with what are we doing when you say sequester co2 really what you're doing is you're taking co2 from an emitter and you're drilling an injection well down into the earth it goes about a mile into the earth and what you're looking for is you're looking for geology the geology looks something like a cap rock which means an impermeable seal of rock so you could think of a slate patio or something you could spray gas at that thing all day long no gas molecules are getting through that, you're looking for that seal of rock, that portion of rock might be a 10-story building of rock.

35:46The Earth's crust is enormous. And you're looking for that rock sitting on top of a porous sedimentary rock. If you've ever held in your hands like pumice or sandstone, it has little nooks and crannies in it. The problem we're trying to fight as humans is the CO2 actually wants to go to the area of lowest pressure. It wants to go up in the atmosphere. It does not want to go one mile into the Earth. So we've got to add some energy to it. So we're going to send it down a mile into the earth. Now think about how heavy one mile of rock pushing down on you is. It's a lot of pressure. Let's go back to chemistry class.

36:18What happens to gas under pressure? It's no longer gas. It's actually fluid. That CO2 is going to flow through that rock. One of my partners, John, says it's like pouring water on a bucket of marbles. It's not going to go into a marble, but it's sure going to get in and around these nooks and crannies. All we're doing is repurposing technology that's been in the traditional energy ecosystem for 50 years. So it's not a venture capital exercise that we're up to. It's technical in nature. It's not tech risk in nature. There's only 10 or something permanent sequestration wells operating in the United States right now.

36:51It's very safe. No known industrial accidents tied to injection. What makes an oil and gas operations very dangerous? Well, the reason why humanity likes is it explodes. It lights on fire, whereas CO2 puts out fire. If you wanted to think about it this way, a CO2 spill is the default. That's what you're doing every single day. You're spilling tons of CO2 in the atmosphere. Permitting is a problem though. Now that you're a government contractor, you got to play by their rules. So that's why you don't see so many projects online currently, but there's a large queue of these things coming. If you look at a single one of these projects, how do you think about laying out probability distribution of outcomes?

37:26When you're analyzing one of these projects, there's effectively a handful of component pieces you need to worry about. From an operational perspective, you need to worry about things like what is the capex to drill well? What is your cost to leased landowners? What's the opex to power the compressor to send that CO2 down hole? What's your power cost there? What's the royalty rate that you got to pay the emitter? Or what's the deal structure there? Those are all important, vital underwriting things. And then I'd say there's the idiosyncratic. Does this law get repealed? Does the law change? Does a spill happen?

37:58Theoretically, you're saying they don't happen, but there's a good friend of mine, John Cox, says risk is the price you never thought you'd pay. So be ready for it. Those are the component pieces of underwriting. And then really at the end of the day, you're taking technical expertise on geology and candidly whether or not that rock can support that volume of CO2, or if you need to go to a different rock. And that will drive a lot of your unit economics on these in terms of how far does the CO2 need to go. We were looking at an ethanol plant, great ethanol facility, but it's bounded by a river on one side and a town on the other.

38:31Do you want to build a CO2 pipeline under a river or through a town? So that's the thing that deprioritizes a project is to say, it's not impossible, but in the energy transition, this shouldn't be project number one. Let's do the lowest hay and fruit first. We are going to get to coal plants and natural gas plants, a hundred percent certain in the next decade. why don't we start with these pyramiders first that are more layups operationally? And then let's work on where is CO2 more dilute? So that might be cement, iron and steel, and power. So when you've developed this thesis and clearly understand in the weeds how this all works, how have you gone about implementing that as an investment strategy?

39:07At the end of the day, at Greyrock, we own a couple of development firms that have their own teams of technical experts, management, finance, accounting, land, geology, et cetera. So those teams are at the forefront of talking to emitters. Several of our portfolio companies we just created, one was started with friends and family money, and we came in and massively capitalized them, let's say. So then they're approaching emitters. Your goal is to make this a great deal all around. You're trying to make sure the landowners make money, the emitter makes money, our firm and investors make money. And that's really what's a component piece of pulling a deal together.

39:41So a lot of times these are structured as joint ventures, things of that nature where you definitely want the plant incentivized to stay online. They are financially healthy. So that's really the component piece is it's a Venn diagram of where do you have an emitter that's emitting pure CO2? Where do you have geology that's local? Landowners that will cooperate and are aligned with you. There's two portfolio companies that we have that work on this, Vault 44.01, which is the molecular weight of carbon dioxide, and then Carbon Cycle. And Vault's really focused on ethanol plants. Carbon Cycle's really focused on chemicals and natural gas processing.

40:13And that's how a deal comes together with an emitter. I had to say, what's the nexus of value here? It's the emissions. Ironically, by virtue of putting a price on carbon, you've actually made carbon valuable under the IRA. So as you've studied this ecosystem, looking for these little niche opportunities that look like great investments under the theme of something where you feel a lot of things are overcapitalized, where have you looked and found other opportunities? We think there's too much capital chasing renewables and renewables are actually disrupting our grid system. They're causing intraday price volatility.

40:44They're causing electricity to be less reliable. That has actually, in a weird way, placed weight on the value of a dispatchable electron. The value of an electron that you can say, I want you on or off, because you can't really tell the wind to blow or tell the sun to shine. So in electrification, for example, we've been chasing weird problems. You'll start to get the theme that all of our problems tend to be a little weird. But the weird problem looks like there's upstream companies that are flaring natural gas. So why does this happen? A lot of times when an operator is drilling a well, that well is mainly for the oil economics.

41:21And if the gas is priced too cheaply, there's not enough money in the ecosystem to pay for a pipeline to get it out of there, or the pipeline's already filled. That causes this friction where operators flare natural gas and burn it off. That is a terrible thing. It's terrible for the environment. It's actually terrible for the upstream operators. It's terrible for the mineral owner. It's just one of these inefficiencies of life. So we have a firm, Conduit, that goes to these firms and says, hey, in lieu of you flaring methane, which is very bad for the environment as well, why don't we put that methane into some Rolls-Royce hybrid engines?

41:56So they're part battery, part thermal. And instead of getting value by selling natural gas molecules, let's get value by selling electrons to the grid. It's decarbonizing. It reduces CO2e by about 40%. I think that one of the worst kept secrets out there is AI is very power intensive. And these data center developers are in an arms race. They are facing a challenge which looks like, hey, if I want to plug into a grid system, it takes me five to six years to do so. That's an eternity in their arms race. Whereas our team can have them fired up in under 12 months. So we're a bridge power solution to get a data center developed there, but in a decarbonizing way.

42:33So those are examples of stuff where we see, where is there an inefficiency? Inherently, I'm telling you there's a problem in renewables, which is if you went full merchant on renewables, there's no market for your electrons. Who's going to solve that in five or seven years from now? And they're fine for right now. Who's going to solve that? Is that a vulture debt guy who goes in and buys a mez piece and owns a free facility? There's so many different ways that you could play this over time. We have another problem that we've been solving recently, which is around orphaned oil and gas wells. So an orphan well is, think of a well without an owner.

43:06It's exactly what it sounds like. It sounds weird, but there's at least 100 ,000, some people estimate up to a million orphan wells in the United States. This isn't Exxon or Chevron doing this. This is like if Matt Miller drilled a well in 1949, but Matt dies penniless with no errors. These wells have no owner and they're leaking methane. Methane is about 30 times more potent to the atmosphere than CO2. It's a definite greenhouse gas. So our team goes out, measures these methane leaks, plugs the well, permanently stopping it with cement, and sells voluntary offset credits to technology firms, financial services firms that need to offset their own corporate emissions.

43:38So those are some areas of the energy transition where we found there's not as much competition or this ecosystem is sufficiently nuanced. And carbon capture, well, you need to know subsurface and land and all those traditional energy skill sets. You need to be talking to emitters. You also need to know tax law. It's a weird nexus where GrayRock's able to try to play in the energy transition. With the broader energy transition investment opportunity set over capitalized, how do you think this plays out over the next five or 10 years? I tell investors, despite the fact that we raise money in the energy transition, I'd argue vehemently there's too much money in the energy transition.

44:11It's just concentrated in the hands of very large funds who can't get out of bed without writing a billion dollar equity check. What our goal is, is to try to build seedlings for those platforms to eat. My hope is that LPs don't get burned in the energy transition because I think if they do, it sets us all back on what's common goal for everyone. I think that you're going to see government stepping in and creating more and more policy. So the United States under the IRA has picked a carrot strategy. We're going to reward you for behaving in a way that we want you to behave. Is there a stick strategy down the road?

44:44Probably. Look, the SEC is making people measure their emissions. Scope one, scope two, scope three. When the government's asking you to measure something, I got news for you. That thing's going to be taxed. That thing is going to be taxed at some point in time, which is a whole different revenue source for the energy transition over time. I think that there will be low-hanging fruit to achieve in the energy transition, but I think it'll take decades. This is not something that's going to happen overnight, especially when you consider things like energy equity. The impact on raising people's energy prices too fast.

45:12Bill Gates talks about a green premium. Inherently, all of these things are just more expensive to do. You can't do that too fast because the reality of the situation is we're trying to fight for a world 100 years from now where we're really worried about people dying. If you do it too fast, people don't die 100 years from now. They die tomorrow. If you're in Chicago and you can't afford your heating bill, you die tonight. There's a tension there on the transition, but I think it's durable and I think it's here for decades to come. If you were tasked with putting significantly more scale dollars to work in this space and entering in some of these places that you feel are overcapitalized, where have you seen at least some opportunities that people can get reasonable returns from their capital?

45:53I'm going to cheat on your question a little bit. If capital was not an issue, I think it's in nuclear. Nuclear energy is extremely safe. It's zero emissions. It is dispatchable, baseload power. It's an old technology. There's not some tech risk around fission technology. If I was king for a day and I created the United States climate policy, it would look something like a Manhattan Project 2.0. It would look something like we're going to build a thousand nuclear reactors in the United States, some crazy number. I'm going to have the Army Corps of Engineers do it. And then once a plant is built, we're going to auction it off to a utility.

46:26Therefore, utilities don't bear the cost overruns. So if you look at Vogel, the most recent nuke plant to come online, I think Southern Company had said it was going to be$14 billion and ended up being$40 billion. You can't do that too many times. So we have a real problem, which is that ecosystem needs more at-bats, but each at-bat is too expensive for private corporations, largely due to regulation. That's where I think you could have a really material impact. And if you took 50 or 100-year time horizon on those investments, it would be universe-changing. I think one that I'm bearish on is electric vehicles.

46:57There's several things about EVs that are, when you dive in. They're just not a good fit for your average customer. And I'm just putting my United States lens on here. They're very expensive. The charging time, the range anxiety, and all these component pieces are something to think about. I actually think the solution set for the US is going to be hybridization of everything. So if I can take a car, it doesn't need a 300-mile battery. It needs a 30-mile battery. Realistically, that would probably reduce our personal CO2 emissions by like 95%. The other thing that I'd point out to people here is the battery supply chain is an unmitigated disaster.

47:29It is OPEC on steroids. China controls over 90 % of the rare earth refining capacity. For some sense of scale, OPEC is 13 members and controls about 30 % of the global oil market. So it's 3X has concentrated here. 99.9 % of the world's lithium reserves are in the hands of just four countries, China, Chile, Argentina, Australia, none of which are the United States. I think it's bad energy policy for us to say, hey, we've been fighting OPEC for decades and decades and decades. Let's do it again, just with a different cast of characters. So that's where I think you will see things that look like the hybridization model where you don't disrupt people's actual lifestyles.

48:06What are some of the other, say, misperceptions that you see in the space? Natural gas. Oh man, people hate fossil fuels. They just hate them. What we try to tell people is natural gas globally has been the largest decarbonization project by far. The United States, by virtue of fracking, has natural gas prices that are just structurally lower than the rest of the globe. They are 80 % lower than Europe. That's why you're seeing people like BASF move to the United States. It is actually genuinely cheaper for folks to operate here. When I turn off a coal plant and turn on a natural gas plant instead, I'm at 50 % less CO2.

48:45And this is one of the largest decarbonization projects. And there's no carbon credits attached to this thing. There's no IRA. There's no nasty incentives. It just got cheaper to burn natural gas versus coal. And when you look at the delta between if I move from a coal plant to a natural gas plant and a natural gas plant to a renewables plant, that first step has 2.5 times the environmental impact. It is still labeled as an evil fossil fuel. But I actually think natural gas is the battery that's going to get all this stuff done. It is dispatchable. It is online. It's reliable. It's cleaner. It does emit some CO2.

49:20But I tend to say, hey, look, let's move from 100 units to 50. Let's worry about the next 50 next. People tend to lump oil and gas. Well, they're used for two totally fundamentally different things. Oil is used for transportation and plastics and jet fuel and stuff like that. Natural gas is largely used for power, heating. We're not burning crude oil in our power plants and we're not gassing up our cars with natural gas. So I think that's just been lost. The United States has reduced its CO2 emissions since 2005, largely on the back of fracking and getting that natural gas molecule out. I wish that there wasn't evangelism against natural gas because I think it solves for this energy equity and cleaning up and all this other stuff.

49:55Any others? This is the other thing that I tell people in the energy transition is it's going to sound really cheesy, but it's a phrase from Bible study. And the phrase from Bible study is, if hospitals are for sick people, then the church is for sinners. What does that mean? So when you're sick, you go to the hospital to get fixed. Don't worry that you see a sinner in the pews on Sunday mornings. That's actually what you want. They're there to get fixed. The same thing is true of emitters. If you start this conversation with X, Y, and Z company in Tulsa, Oklahoma is the devil. You actually have set the energy transition back, in my opinion.

50:32These are not bad people that work at these firms. They really genuinely are not. They're reacting to market forces on demand of their core product. for some that may have more evangelical opinions on this transition is just to say, look, at the end of the day, you may not be welcome in that conference room in Shreveport. You may not be welcome in Midland, Texas. And what we try to do is merge these worlds together, is just to say, hey, when we're in those conference rooms, realistically, we're not bringing up climate. We just aren't. We're bringing up money. And when we're in other conference rooms, we talk about how we're cleaning up the operations of these firms.

51:07So that's where I think that There is a huge opportunity in the transition is to be that bridge that helps those two camps talk to each other. This situation's become politically imbued, but it shouldn't be. So we just try to help bridge that. Matt, I want to make sure I get a chance to ask you a couple of closing questions. What is your favorite hobby or activity outside of work and family? I'm a golfer, I suppose would be my favorite hobby. Not a very good one, but I like getting outside and it's really pretty. And my wife's from Augusta, so I got some good hometown baseball there. What's one fact that most people don't know about you?

51:40People don't see. When my parents got divorced when I was a little kid, we moved 13 times in under three years. I'm very thankful for where I am. Very, very thankful. Anybody who says money doesn't buy a happiness, I'd argue also probably hasn't ever had zero of it. It is a very motivating factor over time. What's your biggest pet peeve? My biggest pet peeve is when people don't do what you say you're going to do. Closing table retrade. I'm going to sell you an asset for$100. Oh, did I say 100? I'm at 130 or something along those lines. Just let your yes be your yes and your no be your no. So that's really probably my biggest pet peeve is when people aren't being honest with each other.

52:19Which two people have had the biggest impact on your professional life? I'm going to give a random shout out here. Kevin Stout, when we were 28 and started in GrayRock, I sent a cold email to Kevin at Spider and he came into our fund one. But for the grace of God, I have no idea why he did it. We were so young. My partner, Kurt, has a phrase where he says, we dance with those that brung you. For him and Lauren Messerv and Amy Diamond, Michelle Everard, I owe them a lot. And then I think that that's the investor piece. I won't name names here, but ironically, finding out what you don't like in business.

52:55So in some of my prior career paths, I learned if I ever employ people, I'm not going to treat that way. If I ever have investor capital, I'm not going to do that. I think that those are really important lessons to know just because look, the hours are long, but the years are short. What's the best advice you've ever received? It would probably be my mother. When you're going through a hard time, take a breath. The first hour is the worst hour. The second hour, second worst hour. Calm down. It's going to be okay. You're going to make it through. That patience and perseverance is important to have because, and this goes in family and this goes in business, you're going to have days where it's like, gosh, I just want to hang it up.

53:31This is brutal. And then you're going to have other days that are just absolutely euphoric and you have to experience the troughs in order to love the peaks. So I think that would be the best advice. And Matt, last one. What life lesson have you learned that you wish you knew a lot earlier in life? The capacity to change. There's a phrase I use for that, to have strong opinions, weakly held, and the capacity to change your mind. And this goes beyond investing. This can go into politics. This can go into relationships. It's just to say the capacity to change your mind shows an enormous level of maturity to say, I was wrong.

54:04I really was. You were right and I was wrong. There is nothing wrong with that. So that really is something that's a core tenant of also how we behave at Gray Rock. It's just to say, hey, you have an obligation to dissent. Maybe the firm doesn't go with you, but we also don't stifle. We're not trying to make sure that folks' opinions aren't heard, because then you're just surrounded by a bunch of sycophantic yes people. That's not helpful to anybody. That's an important lesson. Well, Matt, thanks so much for sharing your incredible insight and wisdom in this space. Thanks for having me. I really enjoyed it.

54:35Thanks 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. Have a good one and see you next time. Thank you.