Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364]

25:16He comes out of the meeting and he goes, huh, I get it. Now the best retailers are cults. This is a cult. And I was like, it's kind of true. Okay, so Costco, is Costco a cult? And I mean it in the best sense of the word. But it is because all their management started at the store. They don't recruit from the outside. They're corporate. They don't even question the 10 % markup. No one does. It's like religion. You go visit that company. It's all stuck. E-commerce, maybe someday. They're still way behind. They're killing it anyway. They believe in simplicity. They say, no, we're not going to do that.

25:54Complexity is cost. We're not doing that, okay? And then I went to see them in Mexico. We went on a sub-management there, sub-management in the UK. They all dress the same. They're like in a uniform. They all look the same. They're in like a blue Kirkland button down. Even though they don't have a uniform, they all speak the same. They all speak in the same language. There are these rituals. Cults have rituals. They all fly to Seattle once a month. They all been doing this forever and ever. I mean, not much has changed there, but there's just, they won't mark up, gosh, darn it. The hot dog's going to be a buck 50 no matter what.

26:26So I think there's this element of cult. Even with Home Depot, they all have some sort of obsession about the customer experience, what they do and why it matters. The way I got interested, and I'll tell you the story because this is like another why the cult thing matters, is somebody introduced me to Ken Langone when I picked up the large cap retailers. This was like in 2008, Frank Blake had just come in. I was sort of dismissive. He drove me around for an entire day to look at stores and he explained the history. One of the things that happened, why Frank Blake was so powerful. And he said, look, the whole catalyst, like we thought we hired Nardelli because we thought we had to fix systems and process, which we did.

27:07But the cure was worse than the disease because he added all this complexity and reports. He didn't go to the issue and he didn't understand the culture and the cult. So he stopped no more store parties with kegs. The lawyers got involved. This was a company that basically hired ground up like Costco. Employees got stock options, made the average American rich. He's like, this is what we do. It's our purpose. It's our customer. It's our employee. We want to give these people opportunity. That's America. Ken's from an immigrant family. It's America. We have to give opportunity. And he said, Nardelli was abusing this.

27:42And he said, Bernie Marcus had this bad experience with a dishwasher delivery. At one point, he was getting upset. And he basically called and said, he's abusing my child. We always stand by our product. He doesn't get what we're doing. It's got to stop. He's got to go. So Frank Blake comes in and he recognizes he knows nothing about retail on a stack of 100 resumes. You'd never pick them for the job. He was hired by Nardelli. He was like a lawyer at GE doing M &A, bad deals for Nardelli. And he said, first thing we're going to do is have Bernie come back and talk to us. Second thing we're going to do is throw the stores a keg party.

28:16What sort of freedom do we want to allow, even though maybe some bad stuff had been happening with that? And then the third thing we're going to do is we're going to start bleeding orange again. Bleed orange. They have a motto. He had something to tap into. It was latent. It was waiting for Superman. It was just there. It just needed a leader to come back in and say, I get the magic. Ardeli did not. And he was able to address all those problems through simplifying, through focusing on a couple of the right things, through unleashing the culture. But I think retail is an industry where you have a clear customer, you can see them, and you have these store employees.

28:52So you have to mobilize them to care about the customer. And at corporate, if you can buy properly and be disciplined on the values, when you do that, there's just such loyalty and persistence. There's a habit in going back. And then you earn the right, You have trust to sell to other things. So it can compound. And retail is the classic flywheel business. Comps one year for money to invest in the value proposition, which means widen your value gap in the next year. Your dominance just grows. So it's a classic compounding, but you have to stay true to the discipline. And the people are really important.

29:29You and I had a discussion about the people versus the culture, but the leadership sets the tone, whether you can unlock the culture or you squelch it. then just open up stores kind of grow there's a habit element and we met with um mark casey covered my colleague was he did the internet company so he covered amazon and i did the retailers and like during this time we're figuring out okay wait amazon might be poison to retail and there might be really something big here we were visiting the companies together and we had this meeting with jeff bezos that i'll never forget and this was in 2010 mark said i don't mean to be ungrateful, but I understand given how great this is, why your retail business isn't growing faster in these new categories.

30:12And Bezos said to him, let me tell you something. Habits are really powerful. They take a long time to change, but when they change, they're very hard to disrupt. We're working on changing habits, but when they do, they're going to stick with us. So be patient. There's a habit in these retailers and Costco So they have earned the trust of their customer, paid a shop in a warehouse with a limited selection. They can do anything almost. They're just so disciplined. So when you earn the trust, you just kind of keep getting more and more of the pie. And the bigger you get, the easier it is to grow in some cases.

30:54Can you tell me a little bit about what you've observed, obviously such a tech dominant couple decades in markets, comparing the dynamics of the tech market and the growth tech market to that of healthcare, which seems to me like the other big behemoth on the come, also some just huge companies there already. If you had to compare and contrast those two sectors, what have you learned? So what's interesting about healthcare, I'll give you the kind of the healthcare narrative, having watched it for 15 years and our analysts, Rich Wolf and Chris Lee and Songding, we have this really amazing healthcare team that has like this long history covering the industry.

31:31So anytime I go out of my expertise zone, I'm copying from others inside of capital. But what's fascinating to me about healthcare is you have payers and you have regulators or regulation that basically they can be inhibitors to or accelerants of change. Unlike tech, you just need a new product, go. Adoption happens. That's something to respect. But it's fascinating because what you've seen, and I'm going to go back through the history because I think it helps us understand where we are today and the potential opportunities, is when the HMOs came to place fee for service because healthcare costs were out of control, the payers had the power, and the government sort of accelerated that with Obamacare by Medicare Advantage.

32:16All these HMOs basically controlled who got access to what, and they keep the spread. So first place they go, hospitals are the biggest chunk of healthcare. It's 40 % of healthcare spending. And that was egregious. The first place they go is they just cut the hospitals, the volumes, the price, go to outpatients. They whacked that. And that hurt the hospitals, suppliers, the med tech companies. Hospitals started employing doctors and consolidating. And so the med tech companies, their pricing was pressured. Their volume was pressured. And so a lot of just like needless activity was coming out. But it really crushed the hospital industry and the med tech industry.

32:51A couple of companies within that emerged and got stronger. HCA is hospital. That stock's like been a 25 % compounder for a decade, hospital, because they dominate these local markets. And then in MedTech, Boston Scientific, the industry structures improve. There's fewer, and they have more power, and they're innovating, and they're solving problems. So now pharma, whereas pharma, it's 10 % of healthcare spending, and they take a lot of risk. They have 20 % of sales is R &D. They have all these pipeline cliffs. And the government's like always pressuring them on price on Me Too products. But pharma's also consolidated and now innovating, which is really interesting because Eli Lilly with the GLP-1s, obesity, other diseases, Alzheimer's.

33:36I mean, it's pretty fascinating. And unlike other drugs in the past, there's a moat for generics, which is the manufacturing. It just makes no sense for a generic company to try to, they can't invest or copy. And even Vertex and their cystic fibrosis business, they've got a process that lots of generics have tried to copy the drug and can't. So they've held on to that cash flow stream after the patent window expires. And then they're investing and they're creating new things like pain. So what I think is interesting about that is pharma is such a tiny part of the pie. And they're actually now preventing up front.

34:12There are these drugs that are emerging that can solve lots of problems up front. And they have the long, assured tail of a patent without generics and possibly addiction, Alzheimer's or other applications. So Eli Lilly, I know you've talked with my colleague, Carl Quadja, about it. He was the first person to tell me about any of this stuff when it was just emerging. Yeah. His superpower is products. He's walking around the office right now with the Apple Vision Pro. So he just, yeah, what I think is interesting is I just wonder in healthcare, if some of the dynamics that played out in tech, fewer, bigger, stronger, these dominant platforms aren't emerging.

34:55Eli Lilly has Lilly Direct. We just saw them like a month ago. That's fascinating. That's so fascinating to me. Why does United get to decide who gets the drug? Government can do whatever they want. They can contract with Lilly. United built Optum Health so they could hedge their HMO business and leverage that. I don't know. What are they going to do with all this capital? It's crazy. I mean, and they've been working at this for a decade, a decade. A decade ago, they were at 12 times earnings and Pfizer was at 12 times earnings. They've grown a ton of multiples higher, Pfizer hasn't grown multiples lower.

35:28It's just a reminder of within a sector what's mattering over long periods of times, there can be these divergences. So what I say is, I just wonder if there's a pocket within healthcare, it's like pharma is now striking back, scale might matter. It wasn't a biotech, back to the power of the incumbents. You'd invest in these biotech companies, it's sort of like, well, we hope it hits, we hope it passes, that trial, that trial, that trial, that trial. It's really hard. So if anything, my view is, this of course could be wrong, but just to answer your tech question, And there were dynamics that let the big get bigger.

36:05Like in social media with Facebook and Google, you needed to scale the bigger you were. That enhanced the social media experience, the search experience, and the investment. Like, I think it might be happening in pharma. It's really interesting. But I don't know. I'm out of my league. And what's interesting, too, in healthcare, like tech, you know, everybody worries about regulation. Oh, God, you know, the government could not let them do this or they could not do that. And healthcare, I think the government's United's customer. The government can decide, here's what we want to do. And we've seen that happen.

36:40United was an incredible investment for a long period of time because they had multiple waves of growth and the government was supporting it. Big pharma is more interesting than just as a broad statement to me than big tech. And this is back to the imagination. You know, what's Lilly going to look like? If I were running Lily, I would definitely be figuring out how to invest my winnings into having more control and power. How much do you think about power in investing, especially versus other things that you've talked about, like culture? I know you're a huge believer in great cultures and people driving long-term outcomes, and that's definitely true.

37:19How do you stack something like that up against the source of power for a business? Visa has incredible power. I've never heard a word about Visa's culture. They may not have one. It's like business perfected. And so you don't need a good culture. So what trumps what? How do you think about the role of power in your investing? Well, I think it's yes and. I'd say I think the power dynamic matters a lot in an industry. I mean, look what we saw in tech. Apple decides they change the rules, IDFA, and all of a sudden, Facebook and Snap have to re-figure out how they're going to target their customers.

37:56Have you understand that simple point of who has the power? I personally underestimated the power that that ecosystem and that handset had. It's the mall. It's the device. They have the power. They can say yes. They can say no. I think it's an and. The thing that's interesting to me about Visa and why after the crash, the growth stocks went up, they went down. And then I said, okay, what have we learned in the last decade? To your point on this, it really made me appreciate power. We've had 100 meetings with Visa. Nothing's been particularly like, wow, inspiring or magical. But what we have seen is we've seen payments attacked from multiple different angles.

38:37I mean, every angle you can imagine. And what happens to Visa? Absolutely nothing. They're still relevant. They still grow. In that case, that's enough for me. I've learned, and it's a little as you get older, become a little softer about rigidity around things and blacked a little. And I've done a lot of that as a PM over the last couple of years. And one thing I do feel like I underappreciate and what I'm paying more attention to is the past is a predictor of the future. They've been battle tested. That's worth so much. A lot of people look at the future and say, well, how fast is it growing while these debates?

39:14I say, I don't care if X is growing slower than Y, I'm going to pay more for the history. I've seen that company battle tested three times, emerge stronger every time. Intuit, Synopsis, Cadence, like those companies were all born in the 80s. Microsoft tried to kill Intuit tons of times. They're still thriving. There's something there that suggests power. And I do appreciate when the power dynamics are changing. I think it's back to the healthcare thing. That just matters. Have you read that book, Seven Powers? You have to sort of respect it, watch for it, look for it. The luxury goods companies, I don't know about the culture.

39:54Yes, it's like all magical or whatever, but these brands have been around since the 1800s and you can't disrupt. As long as they're managing the scarcity and the desire, Nike versus Hermes, not a question in terms of duration. So that brand power is really rare. Costco has power over their supplier because they have two SKUs. You know, I love it. And they advocate, they use the force for the good. I think they kick Coke out for a while because they have Kirkland. They have private brands. They have their own factories. They have their own chicken factory. I mean, it's just crazy. But they wield it for the customer.

40:32I mean, I can't say I think Visa wields their power for the customer. Yeah, it's just an incredibly elegant business model. And they just let it be. You've never heard of a Visa alumni. Like you're never like, oh, he used to work at Visa. Now he's starting this company. I mean, it's like not a thing. No, it's totally true. But back to simplicity, I do think that's a story that's just never changed around the edges. For a while, I was like, oh, let's own MasterCard. I thought MasterCard was more interesting because the management team and it actually they've been the same. It's the same thing. Don't overcomplicate it.

41:05What do you think are the biggest categories of mistakes made by analysts versus portfolio managers? Well, I think the analysts get attached to their ideas. One of the beautiful things about our system is it's an inverted pyramid. Really, the analysts are like the intellectual capital. They're kind of the kings and queens because they see the industry. They kind of can see the future. They come up with ideas. PMs, just what do I know about this new technology? but I have pattern recognition about people, about business models, about growth cycle phases. So I think where the analysts can go wrong is you get wed to an idea.

41:42You go out there, you have to say to the PMs, we're doing X, and there's just this human aversion to being wrong, especially publicly. So many, some odd people in our group, you decide you're selling something. Prober was a mistake I made a long time ago when I was an analyst. You come in and you're like, guys, I know the idea is to buy low and sell high. Here we are. We bought high and we were gonna be selling what's going to be look like low, but you have to come in and admit you're wrong. And people don't want to do that. And because it's just really, really just psychologically hard back to like the culture that we try to create and the space that we try to create for mistakes.

42:16So I think that one, just the mistake is even when you know you're wrong, the cycle time to admitting that you need like multiple data points, it's sort of death by a thousand cuts, and then it occupies your brain power. And I think often it's wed for me, wed to a person. and it was like no but that person's so great i can't be wrong that person i think the analysts are slower to recognize change that is bad for the thesis it's just the nature of it but it's okay because there's friction back to this concept of friction there's friction to buy an idea and there's friction to sell an idea because when you buy you have to come in and say bang this is what we're doing and when you sell it you have to come in and admit your to a lot of people it's not just Patrick Ann Marie Capital Management.

43:00It's a big thing. So I think that that's hard. And I think also that's number one. And number two, not seeing something for what it is, miscategorizing it something for what it is. I've seen it in multiple cases. I was very guilty of this. The off-pricers, one of the PMs was like, oh, these are great businesses. I said, no, the math does not work. The spreadsheet math, because you miss the vision of what's happening. The department stores are this big. They buy their goods from the department stores that they don't want, and they resell it. For the stocks to work, they have to be as big, if not bigger, than the department stores.

43:34What I was missing is they were becoming the department stores because they were getting their own goods. They were upgrading their stores. I didn't see it for what it was. And so I had a stale voiceover. Things change. Companies change. Positions change. Sometimes it's just lack of imagination. Pushing yourself in as a PM. So many mistakes you make. misunderstanding early just kind of rising tide lifts all boats to there's something special happening, getting caught up in the fray. I think also PMs, I've definitely sold at the wrong time because I've given up on something and I don't understand it.

44:10As an analyst, PM, you're going through a middleman, which is really powerful. And then there's no friction because you can just sell something and move on. You don't need to publicly admit your mistakes. And I think PMs have biases. I have not owned Google because I'm just advertising. I'm saying the same thing. Advertising is a low multiple cyclical business. It's just like missing a point. And also being afraid sometimes distinguishing. This is the other thing on valuation with PMs. This is my view on valuation. It's a price quote. It's telling you what you need to get right. It's 10 times earning and saying there's something wrong with the quality, the duration, the rate.

44:47You're really paying 30 times. And if it's 50 times earnings, so often there's something that's really, it's either going to earn a lot more, just the rate and duration is longer and the quality is greater. And so I think PMs have these shorthands to like, we don't know. So we're like, okay, I'll not look at that. I'll not look at that. I'll not look at that too expensive, interesting, cheap. So I think using valuation as an excuse to own or not own something at extremes is fraught with error. Can you do the same thing you did for retail for restaurants? Well, what's interesting is the restaurants are different from retail because they're very hard to scale.

45:28Why is that? It's because the labor and the customer experience happens at the unit level versus corporate. Corporate, you're buying inventory. You're allocating it to stores. A lot of the big decisions happen. Yes, you have to keep the stores clean from on high, getting that right, and then adding the service. But you're making the food. You're delivering the food. You're greeting the customer. Restaurants would run into a problem. Actually, my first boss was a restaurant analyst. Did all this primary research for him. But he always said, this is the number where they can't grow beyond because you can't hire that many good managers with 20 % turnover, grow the units.

46:05Retail, there are no such constraints. That is something that just naturally can't scale at a company level. That's why the big ones are franchisees like McDonald's. You've got like a collection of people that have skin in the game, own eight units and corporates taking fee for rent and sales, but they care. It's just hard to get people to care. And so if it's dirty and it's not nice and well lit and the experience bad and the food's cold, it's hard to scale. That is why when Chipotle came along, oh my gosh, it was really special because you're like, this is the one company operated chain that's going to be able to scale because you You have a founder who's obsessed with this food with integrity.

46:44It's fast. He's addressed simplicity. He's addressed all the problems in the system. Simple menu. You don't have 20 items on the menu. So anybody can kind of do it. Inverted pyramid. Store managers need more than the district managers. Why do you need a district manager? Because there's a problem with the store manager. So make them the entrepreneur and owner. And just incredible unit economics. I mean, these things are like ATM machines. It's insane. And you just like capitalize on the zeitgeist and build this whole like following. So restaurants are different from retail because it's not as easy to scale.

47:16There aren't a bunch of large cap restaurant chains, unlike retail. The franchise model is pretty powerful. And what Chipotle has done is pretty powerful too. But the similarities are like real estate matters, store experience matters. But in a tight labor market, it's tough. And what's interesting about McDonald's, it's such an affection for that company. It works everywhere. They have one concept. I think it's 60 or 70 % of their operating income is from rent. They're a landlord. They control the real estate. The others didn't. So that's why they've endured. They had a big insight about like, let's own the real estate so our franchisees don't get whipped around with pricing and we can co-invest with them and the experience.

47:55And now, digital, mobile ordering is enhancing the productivity and reducing even those kiosks, the need for labor. And in a tight labor market, it's big. the little guys can't invest. They have some external dynamics now that are contributing to scale. But it's really interesting. I mean, even with McDonald's, if you look at all their good ideas, the franchisees have come up with, it's almost like Shopify, how they have that partner ecosystem. They have franchisees, this ecosystem, and the franchisees are always mad at corporate, no matter how much money they're making. When I used to cover McDonald's, I'd go speak to the franchisees and I knew a bunch of them and they're killing it.

48:33And they're just so mad and it's not good enough. But that like tension of two owners with the same kind of objective is unique. I love that about it because I feel like that's a hedge that they're going to get to the right decision because you have so many eyes on it. Almost like our system for something to rise to the top of the Egg McMuffin to go everywhere in the 1970s. By the way, McDonald's is a big breakfast business. Breakfast is a habit. That's like an annuity. I love the time you described spending with analysts, if you had to assign the study of the history of three companies to every analyst that was totally new to the investing business, what three companies popped to mind and why?

49:14Hermes is a family business. They were disrupted or settles. You could have painted a case at the time. They're in trouble. Caterpillar. I just think the industrials are fascinating. Those things aren't disrupted. I mean, many of those companies have been around. I mean, think about their histories, they're like 100 years. Deer, I mean, even Carrier, 1910. I mean, these are enduring businesses that have gone through various iterations, conglomerates, spinoffs. But if you and I wanted to create a Costco, we couldn't with all the money in the world, real estate, loyalty. We just couldn't. And if we wanted to create a Caterpillar, we couldn't.

49:53Pretty dominant, big power business, big construction business. And they're kind of like the arms dealer to the global infrastructure build out. And you've got Komatsu, but they're sort of behind. And it reminds me a little bit of Home Depot in that the analyst is like, look, Gigi Particini, she said there's this tailwind. She's for their utility analyst, Dominic Phillips. There's a tailwind from the Inflation Reduction Act. So the market is underestimating the GDP plus plus growth that could happen. And at the same time, under the current CEO, who's been in the slot since 2015, he has improved every aspects of their operation.

50:33He's simplified their products, reduced the catalog of the products. He's reduced working capital. He's reduced the number of factories and simplified every aspect of what they've done. He's simplified and streamlined. So incremental margins, last three years, the top line's grown 4%. The free cash flow has grown 22%. It has gone up. So there's no disruption risk. You just have a cycle. There's no competition really. I mean, there's Komatsu, but like they've got brand loyalty and you've got three big businesses. They have a big power business. I mean, all this AI stuff, speaking of, it's going to need power.

51:08And so there's like a big electricity. There's that redoing of the grid that's probably going to happen. Rebuilding of war-torn zones. There's a lot of reshoring. There's lots of demand. And the companies just become stronger. And they basically have been in the demand desert for a decade. And so I love these companies. It enables you to do tough things. Home Depot coming out of the crisis, it can accelerate change. I just love to understand the history. Two very different kinds of enduring so far, Hermes and Caterpillar. The other one I think is really interesting is HCA. local monopolies yeah and also i mean went down and saw them in nashville at the analyst and a couple of pms and i just think that's fascinating like the frist family ownership and involvement and the ceo is wow he is something else he's a master class i love these situations where it's like dark and they invert it the advantage is the disadvantage becomes the advantage compounded earnings with 15 % operating margins, consistent 15 % RLIs of their hospital.

52:14They have the power. United has lower margins in HCA's markets, lower medical margins. Why? They have a specialist. They have a facilities. You can't really, you know, building new hospitals or outpatients. Speaking of power, I think they have power. But the history of the hospital industry and like how HCA became HCA, was it the family? Was it luck? How cool would it be? It's top of mind because we're starting to do more writing in the media business. And I'm thinking a lot about compression ratios. So like this podcast takes whatever the same amount of times to create as it does to consume. But what if it took 400 times as much to create as to consume?

52:55And you can do that in great writing. Imagine how cool it would be to have access to your historical notes on a caterpillar going back 100 years. and then how amazing that report would be, like the case study report of Caterpillar with first-party accounts and data of the thing. You should do it. It'd be the coolest thing ever. You're inspiring me, Patrick. This is like bringing it home to capital. We'll go out and say, let's get Expert X and to talk to us about Y or, you know, no, no, no, no. The most interesting people are inside and in the room. It's all here. You have three equity groups. There's three different investment management organizations and a fixed income manager.

53:38So you think about how many people are looking at each sector and each company and been writing on it for how long. It's mind-blowing. I could sit and read. I could just study these companies. I feel very blessed. I don't have the background. I go to business school. I started as somebody's secretary just because I needed a job and wanted to live in San Francisco. And then I wanted to go to Montgomery Securities. That seemed like a fun place to work. And there have been a bunch of people along the way. saw something in me and spoke positive words into me about potential and saw a vision for me.

54:12And I just feel so grateful to be here. I would pay to work here. I'd want to say that I'd buy a lot of our meetings at auction. I'd pay for our research. And I learned so much from everybody here. And I love it. And I love getting older too, because it's like you have more mistakes and scars. And I love all these talented young analysts we hire. Just paying it forward where you say, I see something in you. You're so amazing. And the system, the whole point of it is just to find out what you're great at, put you in a spot to shine and believe in you. And just belief is so powerful. You're not always right.

54:48Just even the fact that I get to talk to you, it's not because of me, it's because of capital. Anyway, I just feel very, very grateful. And I feel like too, also our industry, active management serves such an important role in the US economy. And And we're a long-term shareholder that has, I think, too, having a vision for a company is as important to us as sometimes to them, speaking belief and power into what's possible. And there are just all sorts of lovely knock-on effects, too. So at the end of the day, I'm grateful. I get to do what I love. You've set me up perfectly for my traditional closing question.

55:26I'll force you to zoom in on the category of gratitude. what is the kindest individual thing that anyone's ever done for you? Well, I'm going to focus on professional, just given that's the tone. Because if I had to go to personal, it would be my husband. But I'll go to my professional story, which is my original boss, John Weiss, who was the restaurant analyst at Montgomery, who hired me as his assistant, saw something in me. And actually, he and I just had dinner on Monday night. We still stay in touch. 30 years ago, hired me as an assistant. And I made his travel arrangements and marked up old fashion maps on how he should get to the different restaurants that he was going to go see with a restaurant analyst to go see.

56:06Anyway, he promoted me twice, once to his research associate, and I didn't even really want the job. And the second time when he retired, he gave me his job as a salesman analyst. And not only did he do that, I said, I don't want to do this. I want to go work in a nonprofit. Like I had traveled. I was like, this is not what I want to do. I'm not good at numbers. I don't see it. He said, you're going to be better than I ever was. You've got a lot ahead of you. You're going to take my job. The answer is not no. It'll take you to meet the clients, you know, and so Jenison and Fidelity and all of his friends.

56:38And he's like, and I'm going to be there for you. And you're going to be great. Had he not done that, I had no interest in doing this, but I love what I do. He said, this is what you're great at. Stop focusing on the things you're not great at. You're going to be great. And that's why I'm here. And there were a series of people that have done that along the way. My friend Greg once saw something in me, but that was the original act of kindness. If I was consistent with my conversation with Carl, your colleague, a couple of them, if I was a young person interested in investing, I would so encourage them to look at capital as a place to be.

57:13I mean, it's just as an ecosystem of of curious, voracious general investors. There's just really not other places quite like it. As I expected, it's been a total pleasure to talk to you and hear about your experience, your ideas, your theories, your curiosities. Thank you so much for your time. Thank you for giving me the opportunity to do this. I enjoyed it, Patrick, and thanks for all you do. If you enjoyed this episode, check out joincolossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.

58:18Thank you.