In praise of great management. September 1, 2023

0:07Welcome to Motley Fool Money, the podcast that has been protected from competition by Qatar Airways. I'm Scott Phillips. He is Andrew Page. Mr. Page, good morning. Good morning, mate. It's great to have friends in high places, isn't it? I hear that Qatar Airways is not allowed to launch a competitor's straw man. I'm told that's the most recent decision made by the Albanese government. Is that correct? Mate, it's in the national interest. In the national interest. It's in the national interest, yep. If they did launch a competitor, what sort of business would it be? I'm trying to think of how they might describe it.

0:41Well, you know, it'd probably be private. but it'd probably be a club of some sort. Makes sense. Probably related to investment. Okay. So private, it'd be a club at investment. Would it be offered in physical form or would it be maybe - Online. Online, online. Okay. Yes, you're right. Thank you for the reminder. Oh, man. We are stressing the patience of our listeners. Mate - We, we, don't rope me into this dad joke. Oh, come on. I'm just forced to play along. Oh, rubbish, rubbish. If I didn't do it, you'd be disappointed. Mate, how's your week made? I was just saying to you off air, it's just so busy.

1:18It's crazy busy. The drinking from the fire hose of earning season. Yeah. It's great. I mean, we're going to go from feast to famine. It's the last day of August. So companies who have the end of the financial year or half year in some cases in June 30, this is it. You've got to release your results by today as we're recording on the 31st of August. So it's going to get very quiet very quickly, which I'm looking forward to. I'm looking forward to. We say that, give us a week and a half. You're like, what do we do now? I don't know. It's a real, I know we say this every earnings season, but it's really weird.

1:53It's almost kind of, you know, just in life, you get used to a certain pace of things, right? And so for the first two weeks of earnings, you're like, oh my God, I can't keep up. But in an earnings season, you're like, okay, I've got this. I've got the cadence. I'm keeping up. This is good. And then it stops like, where have you gone? Fellas, fellas. It's one of those kind of, you know, That's one of those experiences where it just, yeah, you're right. It's absolutely feast to famine and back again. I think I've got a better headspace this time around. God knows how many years. Just because I feel there is, particularly when you're in the industry, there is a expectation that results come out and what's your take?

2:29You know, not necessarily even if it's for, you know, quote unquote clients or whatever, but for yourself. You know, I was like, oh, I need an opinion on this. I need to know quickly. And oh, look, the market's moved 10%. gosh there's been we'll talk about this too there's been some huge movements yes and you feel as though you you must read digest you know synthesize and act very quickly and the the observation really is is that you just can't do it that quickly i mean it's just like the reaction is usually very swift and sudden so you you can't do it so i've i've been much more zen about it which is like i'll get to that okay oh you scan it you see the markets and whatever i'll get to it it's already too late in so many ways you know so it's like what's the rush um in in most cases unless there's some glaring you know thesis busting change that that just was completely off the radar it's like a little bit better a little bit worse than i was expecting there's nothing there's nothing to do right um in in most cases and i think that's whenever this is true in life as it is in investing is that whenever you're making a rushed or a forced decision, it's usually a bad decision.

3:40And so I've really just sort of taken the attitude of, huh, I'll get to that and I'll ponder it and I'll make a much more deliberate, I'll deliberate much more heavily on it and hopefully make a much better decision if there is a decision to be made at all. And I don't, I think for the most part there isn't. Yeah, I think that's right. And yet the, well, let's just get into that, mate. We'll come back to some of the bigger macro things but while we're while we're here the um i said i know i've said before in the podcast that the last i must be up to three years maybe it's even more the covid years are kind of just a blur now i don't know how long ago these things happened um we you know markets always responded to to events and to news and they should right to the extent there are different you know realities or different expectations of businesses you want to have a different perspective but it's a big but the size and swiftness of the move as you're referring to have been really really significant and i want to say it's i think mate it's only about four or five years old again we've been the podcast for a while so maybe it's longer than i remember but it's definitely not what well unless unless we're all both got rose colored glasses on which is also possible i just i have no no recollection whatsoever of things being this um what's the word um jittery jittery is probably the right word actually yeah the the very sharp and by the way day two you often have a lot of bounce back and so you've got this really weird thing day one whoop shares down 20 25 day two shares up 10 and you kind of vice versa right and there is no i'm gonna i'm gonna just all right there is absolutely no justification for those two movements together you might say the markets are more efficient it realizes bad stuff more quickly it prices in more quickly therefore we get to where we want we were going to be well if it just fell and stayed there you'd say well okay maybe that's the market just getting better and quicker and computers and algorithms and ai and god knows what else but then when it bounces back that 10 or 15 percent that's kind of like the whole you know morning after you go oh my god what did i do yesterday oh i better buy those shares back i'm an idiot you know the kind of morning after regret stuff it it is i don't know mate i it's i always want to be careful about taking a few examples and drawing direct correlations or trying to explain things in absolute terms.

5:54But I don't know what else we say other than that jitteriness is more significant than it used to be. And again, as you've said lots of times when I get frustrated by things like this, hey, who cares? You take advantage of it if it happens. So there's also that, right? Does it matter in the long term? Of course not. But a bit like short, so we're not going to go into that. What I want to tell our listeners is just be careful about how you respond to the market, right? When the shares fall, we saw some big ones. It was 20 odd percent, 30 odd percent a couple of times, if there's earnings like to think of, of really big companies.

6:25And you kind of look at that and go, all right, well, as an investor, you go, oh my God, the market must know something I don't know. I better do something about that. And that's totally understandable because if people listen to this, they have day jobs that aren't what you and I do, mate, which is do this for a quid. you see company you know abc down you go oh my god i guess i better you know obviously the market has something i don't so you know i better follow the herd it's a really really supernatural instinct and i just maybe maybe i'm just calling it out because i want our listeners to just remember that the you know look at both those yes the big falls the big rises and then the next day the big you know corrections are in either direction a correction or an uprection as you know i like to say andrew uh we called that term many many years ago uh the reverse of a correction It just sounds wrong, but yes.

7:12I know. I do like it. I can't understand why, Andrew. I'm not sure what you're thinking about it. But yeah, I mean, you know, just remember that when the market does that sort of stuff, it's as clueless or more clueless in all probability because it's trying to make stupid split-second decisions rather than actually thinking through the investment cases. And I think a big part of the mistake is to assume that there are rational, well-informed actors behind these moves. I mentioned to you off air, so part of what we do at Strom is we do a lot of CEO interviews in the small cap space. So we've formed up a bit of a network over the years.

7:49And in the wake of the results, I actually had a couple of CEOs call me up because we've spoken to them before. And I guess they feel as though, well, you know, hopefully there's a bit of a finger on the pulse here with what's happening at the club in quote unquote, and I hate the term, retail land. and it's just like um what's the feedback been like because we were sort of drafting our numbers together all smiles around the boardroom table thinking that's right oh the market's gonna love this amazing how lucky are we to have these numbers yeah that's right it's so hard to sit on this news and then you release it to the asx you know and oh this is you know last update this but gosh it came in better than we expected it's just business right there's nothing nefarious here it's like, oh, we think this is going to happen.

8:34Oh, wow. You know, the bean counters have put the numbers and everything together. And wow, things are going good. Orders are coming in. And here you go, Mr. Market. Here's our results. I know that we said that we were going to do this. Look, we did even better. And oh, by the way, there's some really solid momentum in the first month and a half of this current financial year. We're really confident things have never looked better. And shares down 8%. And you're like, what? What's going on here? Can I say, I think CEOs pay way too much attention to share prices anyway. but I've got to say when you put your heart and soul blood, sweat and tears for six months or 12 months in a business and you're like I feel so good about what we've achieved this is amazing we should be really proud of ourselves guys you know the market will like it which is nice and who cares about the share price but you know we'll get a nice pop and that'll be lovely and you know we're on the right path and you know again I will say CEO should stop just worrying about the share price entirely other than if you're raising capital and we'll talk about that if we want to but you kind of start with that and you think and then the market comes out with that apes if I was like, what do you bastards want?

9:34What do you people want from me? You know, literally, what do you want from me? This is a thankless task. I don't even know why I'm doing this. You know, it must be a really difficult thing for a lot of CEOs, a lot of boards, a lot of management teams to, you know, slug your guts out and then have the market go, yeah, or even worse. No, that's not good. We don't like that. Don't like that. We think you're worse than you were a day ago. It must be a brutal thing to have to try and kind of get your head around. It is. I mean, you're absolutely right, though, in terms of I think it's always a bit of an orange flag of leaders in businesses who are too hyper aware of the share price.

10:10My response is usually like I wish I knew. I don't know. I'm surprised as you are. But do you need to raise capital? Like no. It's like, well, who cares? And in fact, if you want to be sensible about it, Isn't that the perfect setup where your business has demonstrated better results than you thought it was possible? The outlook is stronger than you thought and the share price is down. Like, what do you want? I do cut them some slack though because as much as – so I would love to imagine that if you put me – parachuted me into the top job of one of these companies and I'd be like, well, I'm not going to care.

10:51I'm too – what's the word for it? I am not going to muddy myself with worrying about what the stupid market is going to do. But you do have to remember that every second day, some idiot broker or analyst or substantial investor is calling you up and saying, Scott, what's going on with the show? I don't know. I don't care. Well, you should care. So you can imagine that there's a lot of pressure on them. I mean, if I manage with three-month price targets who are saying, I own your shares. if you can't show me you're going to fix it i'm selling your shares i mean you know and then and then you know a board of directors who again for their own reasons or otherwise care about the share price because they want to be popular or successful or something else i mean the the conflicted incentives here and i've got such a quick tangent this is why you want to own businesses if you can not access not exclusively or plenty business who aren't this but you want businesses who have founder ceos or have really large single shareholders who have a track record of caring more about the business and about the long-term returns and the company because we've said many times, Buffett doesn't take analyst calls, right?

11:58It's like, you don't have the share price, sell the shares, I don't care. I'm busy here, guys. And you've got the luxury of doing that because frankly, he's Warren Buffett. He owns enough of the stock and we talk about Tesla fanboys and Apple fanboys, and that's true. The Berkshire faithful are pretty dyes in the wall, right? Yeah, Buffett could ask him to jump off a cliff because it was a good idea. Oh, it's a religion. A whole lot of people would do it, right? So let's be clear about that. But the benefit of that, of generating, of curating that sort of shareholder base, that sort of culture, is you get to say, dude, I don't care.

12:28If you don't like it, fine. Go and do something else. Sell the shares. And more companies, frankly, particularly those – and we blame the CEOs a lot. I said a not-for-profit board, right? So it's not exactly a company board. But directors have to be more accountable. We have to put the torch on them as much as anything, right? because they should either stop saying to the CEO, fix the share price, or back the CEO all the way in and say, dude, I know you're getting pressure from the fund managers. If you've got the strategy right, tell them to go jump. Now they don't and they won't because, well, for many different reasons of incentives and popularity and everything else.

13:06But when we say the CEO, this or the CEO, that, and we're right to do that, that is the person at the top of the corporate management tree, which you have to remember there's a layer above and those people also have responsibility for the culture of the management team and the way they deal with share process as well. Oh, absolutely. In fact, I don't think we put enough emphasis on boards, actually, as investors. They are our shareholder representatives. So, yes, yes, yes. And they're the CEO's boss, right? They're the ones who ultimately call the shots. Yeah, so I think I get it in the context of a couple of – particularly in small cap land where the sell-off has been brutal in the last 12 to 18 months.

13:46That's right. And as I've mentioned before, I think a lot of it was well-deserved, but again, plenty of babies out with the bathwater there. And so I think a few of these boards and management teams are kind of going, okay, well, that, you know, the market's going to do it. You wait till they see what we've been dubbed to, you know, focus on the business, not on the show. Well, here's the business, right? right yeah that's right and so oh and we're down even more okay so anyway so that's weird but but the other comment so i i sort of make for whatever it's worth is um a you know i don't know either and b who cares see i think you get the shareholders you deserve yeah so overly promotional ceos who are out there pumping is too strong a word but i'm gonna go with it pumping the price you know oh we're gonna do this and we're gonna do that and everything's brilliant and and it's Sort of, I get the incentive to do that.

14:37There's a strong incentive to do that. And it's not necessarily a nefarious action if you're just, you know, you're passionate about your business. You see exciting things. You want to tell the world what you can do and what you're achieving and the rest of it. The trouble is, is you make all these promises where you just, you leave yourself very little wiggle room for the inevitable, you know, curve ball that life throws at you. Anyone who's ever run a business knows that that's just how it goes, right? Like, oh, I didn't expect that. And, oh, that's unusual. And, you know, this is happening and now that's happening.

15:09And you attract what I think you'd call the hot money. Whereas those that are very, like you often said, like just don't give outlooks, you know, or just say this is what we're going to do. I don't know. I am going to be so boring as to I will get the patient capital. I will get the ones that get it. And so maybe I avoid a nice little spike over a three-month period or whatever. But this is, by the way, this is also true of fund managers, is that when things get tough, not if, but when things get tough, you've got a very supportive shareholder base there as well. In fact, I know firsthand from a few fund managers that I know is that, particularly those that focus on small caps, obviously they didn't post the best numbers in the last financial year.

16:03but, and this is true of, I'll give the Motley Fool guys a shout out, the Lakehouse guys, right, as well. It's like there wasn't a flood of redemptions because what these guys did, Donnie and Co at Lakehouse and others elsewhere, when times were good, they said, well, we're really happy to report these numbers, but by the way, it's not always going to be like this. And they were very level-headed. And, again, you could imagine when things are running hot, I say, oh, we've just posted a 30 % gain and look what we're going to do. You're going to get the hot money that the second, the second that things look bad, they will, fair weather friends, they are out the door.

16:41And so it's, what am I saying? All of this is very understandable from a human perspective, but it takes real discipline. And I think it takes real discipline to be able to be consistent, almost boring in your messaging. but I think it pays dividends over the long term. And I, for one, see it as an incredibly big tick when you're doing your due diligence on a company. And you do, to your point, find that management team that's got serious skin in the game, who doesn't muddy themselves with the short-term predictions and the rest of it, very much focused on long-term wealth creation and return on invested capital and capital management and all of these kinds of things.

17:25It's just such a – there's no guarantees in this game, but they're very strong signals, I think. And you tend to see these companies having delivered pretty well for their shareholders over the long term, even though they go out of favor for long periods at a time. I think that's right. I wanted to share a little bit. Tom and Amazon shareholder, we all know that. But I wanted to – speaking of long term, it just reminded me – Jeff Bezos has written some great shareholder letters. Oh, brilliant. Some you should always read. Google them. Buffett's, Bezos's. i'm sure there's others out there who write great great stories there's lots yeah um but here's the here's i just want to um it's long so i'm not going to read the whole thing um okay i'm just going to read separate sections just for our our listeners edification quote we believe that a fundamental measure of our success will be the shareholder value we create over the long term uh i'm moving on in quote new quote um because our emphasis on the long term we may make decisions and weigh trade-offs differently than some companies.

18:25Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it's consistent with your investment philosophy, end quote. In other words, he's looking for the shareholders he wants. I'm just going to quickly, the bullet points here. So the bold section says, we will continue to focus relentlessly on our customers, which is a lesson in itself. Quote, we will continue to make investment decisions in the light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.

18:59We will continue to measure our programs and the effectiveness of our investments analytically. We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. When forced to choose from optimizing the appearance of our accounting and maximizing the present value of cash flows, we'll take the cash flows. we'll work hard spend wisely maintain our lean culture we will balance our focus on growth with emphasis on long-term profitability and capital management uh they finished by the way with this we aren't so bold as to claim but the above is the right investment philosophy but it's ours and we will be remiss if we weren't clear in the approach we have taken and we'll continue to take end quote so it's a selective quote from that letter but it really is you know and look again if Amazon went broke in 2000 or had to raise capital, maybe Bezos would have had to pivot.

19:48Maybe the best intentions get washed away with circumstance, right? But it is a really, really strong reminder of what the best businesses tend to do and focus on and be. I got to say, mate, I am always really impressed. You and I have been doing this for a long time. I'm really impressed when relatively young people who are business people, not capital allocators by trade get that early on yeah and i don't know what i don't know what counselor he had maybe he's just a genius maybe he had a great uh mentor or someone from this area who said do this what you need to do um it's very buffett-esque uh but these kind of things you kind of just and again it's not a um yeah to have this maturity and this insight so early a lot of people come to it late right and i've used the example for an apology to religious people out there but But imagine being in a religion and being a priest or a pastor or something and realizing 35 years in, oh, I don't believe this anymore.

20:44Now what do I do? You've kind of followed this trail. And you're like, now how do I sort of regroup to have this so early and say, this is the way I'm going to try and run the business and then do it for 25 plus years. Just really, really impressive. Yeah, I love that. It actually reminded me there of another Bezos quote, which I'm going to butcher, which is something like, Those who don't continuously change their mind vastly underestimate the complexity of the world we live in. Oh, nice. That's a good quote. Something like that, which is, again, it's just to that point of sort of growth. And he sort of cottoned on to some of these concepts early.

21:19You mentioned, another thing I was going to say, you mentioned that there's the Buffetts, there's the Bezos. There's a bunch of really great investors, fund managers, capital allocators, entrepreneurs out there that have got a lot of good writing out there in the public domain. and the thing that I noticed is everyone's got their own sort of style about them, but the core principles pretty much are the same. You know what I mean? They really are. Bezos and Buffett are very different individuals. Yeah, that's right. Amazon and Berkshire are very different companies. But yet when you distill it down, they're kind of saying the same thing, right?

21:56One's more involved in high tech, obviously, but it's still – I mean, it's just get rid of all of this highfalutin nonsense, right? You're growing apples. I'm knitting sweaters. I don't know. Who's creating value for their customers? Those who create value in the way that your 10-year-old would understand it are going to be rewarded, right? Those that are saying, oh, I'm, you know, is it the Sneed? Is it the Lorax? Have you read the Lorax at all? I have never read the Lorax, funnily enough. Oh, do yourself a favor. Dr. Seuss is great. Yeah, your kid will love it. But there's great investing lessons in that, I would argue as well.

22:43In the sense that, you know, it's sort of things will come along all the time that sort of sound good and promise to do this and that really just don't. You know, it's like monkey JPEGs. I was like, what does this do for the world? It doesn't do anything, right? And then there were people who come along that just change everything and create genuine value for people. And the market's not always going to get that. And the value is not always going to be apparent. And this value is not always going to be reflected in any given reporting season in terms of whatever metric you're having to look at.

23:17But if you get that part right, the rewards will come. And I think we just need to come back to basics and reading these people's thoughts. It will always center, I think, around that, about sensibly backing really wonderful, life-enhancing, value-creating opportunities. And doing it with a very long-term lens and focus, with a very overt consideration of what can go wrong. and protection of that just tend to make mistakes like all of us, but they tend to just win over time and then compounding kicks in and it's just a thing of beauty. It really is. And everyone else, everyone else, sorry, mate.

24:04I just like, and yet here we are daily sort of scratching our head, banging our heads on the wall because such and such missed earnings per share target by 0.3 % shares are down this. And, you know, you're watching someone jump up and down on the news. like it is it is a pantomime it is a it is a nonsense and you think when does the this was an epiphany for me a while ago now but it's sort of like there are no adults there are no adults that are out there and stop imagining that there is again well-considered well thought you're thoughtful rational actors making decisions and i can guarantee no matter how advanced we get as a species in another hundred years we'll still be jumping at shadows and we'll still be chasing rainbows and we'll still be doing all of these kinds of crazy things and and frankly long may it endure because that's exactly your your regular point which is actually for all that that's why that's why this conversation is important mate not because we need to be able to rationalize what people do but because you need to know that it's irrational so you can discount it accordingly and invest appropriately and that's that's the key one right because if you follow the market if you watch the market and you get dragged left and right by what's happening share price wise you end up you end up you know normally um almost almost you know imperceptibly becoming part of the game you start to think that their rules are your rules because that's the market and what people talk about on the news and all that kind of stuff so it's like oh okay well i guess that's important then so you start to think in that term and it's completely understandable right because most people here's the other thing most people listening to this podcast and most investors aren't experts in the field of capital allocation specifically and so it's natural if i was going to go and most ceos probably well that's what you have we've said that before if i was going to go work on the factory floor i could say you know what i think these people are all doing it wrong and here's how i'm going to do it instead and it would be stupid because i should say actually i don't know what i'm doing here there are people who are doing doing this for years they probably know what's going on right if i'm going to be an apprentice carpenter i'm probably not going to strike out and say i'm trying to work out carpentry myself maybe you do maybe you're that sort of person and that's frankly that's buffett-esque right like i'm gonna do things myself we're not all buffett um so i don't blame anybody for thinking well you know there are other people out here and they do this thing for a living and they're getting paid well and they work for fun managers they get quoted in the fin and and so therefore i guess i should pay attention um so i think that's that's important but we're kind of again usual uh dead horse that we're flogging but i want to mention one article um speaking of favorite companies i've mentioned berkshire let me mention solpats to get the both out of the way i mentioned amazon i'm on fire so far today I own all three for anyone who wants to know.

26:37Robert Milner, who you have met, I have met. We've had lunch with him in Omaha in Nebraska at a Berkshire Hathaway annual meeting. He was interviewed. He was actually the cover story in the most recent issue of, this is not a regular reading for most people, the Australian Institute of Company Directors magazine. But why I'm mentioning it is because the article is actually on the website of the AICD for free. So Google AICD Milner, M-I-L-L-N-E-R, the top link is almost certainly going to be this interview with Robert Milner or about Robert Milner and again speaking of and the reason I'm mentioning it mate is I wasn't going to but you do that sensible business people and running doing the right thing for the long term like kind of stuff this article is I don't know mate I'm a fan already and I'm a shareholder already so full disclosure on both those areas fan of both Sol Pats and Robert Milner and the work they're doing our top bar later see you who's also a great guy but you read this article and you kind of go either A, this is exactly why I'm investing in this business and why you'll prize these shares out of my cold dead hands.

27:37The other one though, I hope for anyone who does read it and thinks, why am I not a shareholder yet? And you have different approaches, different objectives, and different whatevers. These guys have beaten the market for 20 plus years. They are remarkably good business people. I'm not even going to say invest. I mean, they're invested in the sense they allocate the capital. I mean, their capital allocators, that's their job. But they run the business of capital allocation, if that makes sense, in a really, really thoughtful, sensible way. And they're just, like, common sense 101, right? This is just, it's just very, very simple.

28:09And I just, I'm reading this thing, I read it yesterday or the day before, and I'm just thinking, yeah, obviously. And again, I tweeted during the week, you know, there are rockstar CEOs and directors, right? There's the Bezos and the Musks and the Steve jobs and the whoever else is being followed by the cool kids and we all get excited about the new cool thing the new tech or the new company or the new whatever and they can be great investments they're gonna be terrible investments for what it's worth rob milner is a old white bloke who's you know sitting in his office in in the city and is doing his thing and he's not you know he's in the aicd magazine right rather than the front page of the fin you ask yourself why is that because it's not very exciting but if you don't like money then that's okay go for the excitement it's kind of like money i don't know i'm again i don't have a chance to read it but just anyone out there who wants to know a little bit more about what sensible investing sensible business management looks like um just just have a read i just think it's one of those it's a very simple read it's not very technical um it's not even particularly deep it's not the only thing i'd read about saltpats if you think about investing but start there and kind of read that and go isn't this kind of the sort of person i'd want running the company i had my money invested in And I think for me, it was like, obviously, yes, that's why.

29:22Why do I own the shares? Because these guys with this culture at this business have done a great job, by the way. You can't just talk a good game. They've played a good game as well. A remarkable, remarkable result. Yep, yep. And gosh, they go through massive periods of disinterest from the market. Yes, absolutely. Can we talk, actually, this might be a good segue. Go on. There's – I'll put – I don't own shares, regrettably. That might change in the future. There's a company called ResMed, and it's actually dual listed here and in the U.S. And these guys make reverse pressure sleep apnea machines, CPAP.

30:07I forget the acronym. Positive airway pressure. Oh, thank you. Thank you for saving me there. So it's basically, and sleep apnea is a condition that's on the rise and has been for a while. It is linked to obesity, but there are other risk factors. And if you've got a partner, it's usually male. It's not going to get a good night's sleep. Anyway, this is a business that has just knocked the lights out. They continually get 20 % return on their equity. Earnings per share, dividends have been growing at very attractive rates for many, many, many years. They did really well in COVID because respirators were in high demand.

30:51Anyway, anyway, they had their results out fairly recently. And I'm stalling for time while I try and - Got smashed. Share price got smashed. Get the numbers here. It was$33 before results, now down to$25. So it's a decent fall. 25 but so we are talking about a business as he quickly clicks around uh a 10 billion dollar now now after a 25 percent fall he's a 10 billion dollar business uh it was only at the start of the month that they reported uh for the quarter a 23 increase in revenue for the full year it was up 18 percent uh which was really nice operating profit was up 14 percent you know operating cash They made nearly$700 million just in cash on the operating line.

31:43It's like, what is wrong with this picture here, right? And the narrative, and actually, interesting enough, I believe this is becoming one of the more shorted stocks on the market. Okay. By the way, they have a rock solid balance sheet, and big market opportunity, global leader, blah, blah, blah, blah, blah. But anyway, a lot of our listeners will be familiar with it. So what's going on? Well, what's going on is there's this new class of compound under the umbrella of GLC-1. And again, I'm not going to tell you what that acronym means. I'm not a doctor. I'm not a biochemist. And when you say new class of compound, we're talking about a drug, right, or a treatment.

32:24Sorry, a drug. And it's a weight loss drug. And it's a bit of a wonder drug, it seems, in the sense that it can – I mean, we know obesity is an increasing problem, particularly in the west and this looks as though it can really reverse that and so the thesis here is that well everyone's going to take this drug obesity is a thing of the past and therefore no one's going to have sleep apnea anymore no one's going to need these continuous positive air devices anymore now i don't want to suggest too much what the future will hold because because I don't know. Maybe that's the case. But I felt as though this is potentially a nice example of a business, we're sort of getting at here, long-term wonderful track record of very sensible capital allocation, shareholder wealth creation, that has just been knocked for six on something that may arguably have an impact.