Mailbag: incl. How many banks should I own? August 27, 2023

32:45That's what these institutions do. Period. And they are going to grow roughly over time, I think, at probably wages, plus or minus a bit. And so you're in that same ballpark anyway. So yes, you're right. So do you need to own any? No. Do I think you should own any? I can't tell you what to do, Louis, but I've not recommended it other than for income only. Were you not trying to beat the market? So no. Macquarie, I have recommended to our members. I think Macquarie is a very good business. And a very different beast. Now it also, by the way, is not it's probably riskier in a lot of ways than the big four um babcock and brown the mini macquarie as it was called went stone motherless broke because it made some bets it couldn't meet and so you know you write checks you can't cash guess what happens you go broke that so so i you know macquarie is a better quality business by a decent margin in terms of its growing growth potential diversification of its business geographically and industry by business line but also i actually honestly think you may disagree matt because i know you're pretty negative on property but i think Macquarie is you should be taking this with a bigger grain of salt as as higher risk because it's making leverage bets that one point may catch up with it I don't think it'll happen I wouldn't recommend it if I thought it was going to happen but you know if the banks get recapitalized you may lose most of your money by the way but you know the chance that NAB goes to exactly zero is pretty low you know now Lloyd's in the UK got wiped out by about 90 percent so you know I'm not saying you know 10 percent's the maximum I'm saying it could be massive Macquarie could like Babcock before it go broke.

34:14Now, if there's any Macquarie bankers listening, they're yelling at the pod machine and that's fine. But I just want to be really clear about that. Yeah. Oh, man. You mentioned ComSec before too. So I don't get paid for them. In fact, this will become very apparent that I don't get paid for them because I'm just lazy. And I used to work there years ago and I haven't moved. And I pay much more brokerage than I should. And I'm really not that smart. I signed up for a Titty Waterhouse account back in, I want to say, 1997 or 8, which was acquired by ComSec and I've been there ever since. That's how long I've been a ComSec customer.

34:53I mean, the reason I don't, well, besides being lazy and not very bright, is the fact that I just don't trade very often. I'm a very infrequent, when it actually comes to buying and selling stuff, I don't do it a lot. So it's kind of like, what's the difference? Anyway, there is a tool there. So you click on portfolio and it'll give you a little pie chart of your share diversification. It gives me a nice little score. And it sort of says that, you know, you really want to make sure that you have this many things and exposure to this and that. And there's three. I've only got three colors in my pie chart.

35:3053.1 % is in IT. There you go. Right? 37 % is in industrials. What does that mean? It's all stuff that can't categorize anywhere else, yeah. Oh, I've got 10 % in consumer discretionary. Now, you would look at that and go, whoa, that is hyper-concentrated. I don't want to dox myself too much because there's no upside in sort of revealing too much about things. But I can tell you that of that, you know, more than half of my portfolio in IT, like those companies could not be more different from one another. You know, they share the fact that they have technology-based products. And that's where the beginning and end of the similarity lies.

36:11You know, that is it. And so I would argue, maybe I'm wrong, maybe I'm kidding myself, but I would argue that I'm actually pretty well diversified. But against these traditional things of you should have some mining, you should have some of this, you should have some of that. Like it fails. In fact, I'm getting this really bad score here at the moment. and it's just a nonsense. It's a nonsense. Your money is very precious. You work so hard for that and you've saved it up to melting ice cube in terms of cash because of this 6 % inflation. Like you're trying to put it somewhere for it to grow. It's like you've got this luxury of choice.

36:46Go where the best opportunities are. Now, I would say that was really dumb if they were highly correlated in the sense that these all share the same macro risk factors. Okay, that's a different story, but they don't, you know? And so we've really flogged this horse into the dirt, but you don't need to have it. No, I'm looking at the same on my graph. Mine's very different to yours, mate. But of a financial I own, I own Australian Ethical, N.O.B. and Sol Pats, which aren't exactly your grandfather's financials, right? So it's kind of like, where do you own those financials? How is Sol Pats a financial?

37:18Because they can't find anywhere else to put it. Anyway, it's just - I hate sector classifications. I hate them. Can I tell you my favorite one of the broker things? Charles Schwab is my US broker. And they give you a stock quality or stock, I don't know, ABC mark for the stocks. I don't even know how they come up with it. No idea. We mentioned last week, Berkshire Hathaway hit an all-time high. About, I don't even know, it was nine, 12 months ago. Berkshire Hathaway was a C on their radar. ABC, I'm not sure if it was a D or not, it was a C. Now, it's an A. Like, guys, wait until now to make it an A.

37:50And again, to be fair, it wasn't just my name now, but it wasn't that long ago, I don't think. It's just bloody silly. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

38:05Let's move on to Louis' second question. We can at least answer more than one question in the podcast today. We're getting more time. Question two. I am currently studying for my master's in accounting, and I'm looking forward to graduating next year to begin my journey in either audit or tax. How much value do you place in an auditor's statement in general purpose financial reports? That's how you can tell someone's doing an accounting degree, by the way. They're talking about general purpose financial statements. That's a phrase you use a lot when you do that. Do you read them, he says? Looking through corporate failures, even though assurance has been provided, they still occur.

38:38He says, I'm writing this for my ethics lecture. Louis, you probably should be paying attention to your ethics lecture, Mike, but don't let me be the judge. Do you think audit should be split from the big four, he asks? Looking forward to your thoughts on this. How much value do you put in audit statements in the interest ram? Do you really? Easy. Yeah, zero. Exactly zero?

38:59Well, the moment that you get something where they say the auditors will not sign off on these accounts, I go, something's wrong. Yes. And the shares are probably suspended and it's too late. Right, right, right. In every single other circumstance. Prove me wrong, right? Like, name me a situation. Right now on the ISX, I'm sure there's at least a handful of companies that are about to go on. I guess I'm making the point, though, that the fact there is an auditors report does matter. Oh, well, that's a different story. Yes. Yeah, so the fact that - Sorry. So, auditors have - Just so listeners know, if you don't - Louis studied this, but just so you know, auditors have to, or don't have to, they are paid to provide a statement or a finding, what do they call it?

39:38Something, I can't remember now. Lost the word. Anyway, basically saying whether or not the company's financials are appropriate and whether or not the company is fit to be considered a going concern. In other words, it can pay its bills when they fall due. Right, right. And they normally will provide that unqualified or they will qualify it and say, subject to these conditions, or they will say, we're not prepared to sign off on the fact it's likely to be a going concern. So when you get an orders report in the annual reports of a decent quality company, they're just basically verifying that everything that's in the report should be accurate.

40:09Now, Louis made the point that sometimes that's been a mistake or just straight out wrong. But I just want to make the point, mate, that not having one versus having one, the fact there is an order statement saying it's a going concern is of value, right? Oh, okay. Sorry. Yes. Yes, absolutely. But the thing is, I mean, you don't have a choice. If you're a listed company, you have to get your – so any single company on the ASX you look at will have an auditor's report and every single one of them will say tick. Yes, correct. Because if they didn't say tick, the company would be in suspension. We would be having a very different – so if it's trading as normal, A, it's got an auditor's report says it's fine.

40:52HIH went under. You mentioned Babcock and Brown went under. Enron. All of the auditors signed off on that. Yep. You know, and I'm not, this is sounding like I'm hyper cynical and maybe that's a little bit true. But it's just sort of like, as an investor, when I'm doing my due diligence, do I ever look at, no. Do you? I mean, I've never looked at it, right? Because it doesn't tell me anything other than you've jumped through the right hoops and come out the other side, okay. I'm sure that having an auditor's report required by corporations law means there are fewer failures than there would otherwise be.

41:29Agreed. And because those companies, as you say, might have already suspended. And so there is a process there. And companies know they're going to be audited. So they're less likely to do stupid, dodgy things. So the concept and the execution of an auditors report is an important part of, to my mind, I'll say capital W, Western, which I don't want to call it. Kids have to call it. This is a developed world, whatever we call it now. You know, US, Australia, UK, Germany. You know, these markets that we feel like we can trust as much as possible, the regulators, the regulations and the companies and the disclosures.

42:04And, you know, auditors reports are a really important part of that because they do. I've been in companies, public companies, where they've turned up and said, show me that invoice. Show me that bank account. Show me that, you know, show me the calculations of the, you know, show me the trial balance. All the stuff they're supposed to do. So having an order is really important. To your point, though, Ram, once it's done, is it there? Yes, tick, move on. I will say on a real quick list. It will be there, though. Correct. You don't even have to check. Well, yeah. Well, if you're looking at small companies, you should be a little bit careful.

42:33they do sometimes provide qualified opinions in that auditor's report so there are times where you should absolutely but now it's not going to be this company is a fraud or this company's going broke because they don't get signed off as you say there will be um you know letters that are produced by orders that say we've ordered the books they're legitimate and we have some concerns and that's something you absolutely should be very very careful of but other than that as you say they're there they're there um louis the only thing i would suggest is the the uh reputation of the auditor is something i do look at particularly with smaller companies i once looked at a business on the asx whose auditor was in a residential house in the u.s i literally i literally was this name of you know um something you know was it something Cheatham and Howe.

43:24And I literally looked at it, I Googled it, I went, ah, that's interesting. I'll just, that address is interesting. I looked at it and looked, I think it was Google Earth or whatever it was. I think that's the same one we used for the Menace Detention Center, right? Like it didn't, wasn't the auditor there in like some shack in WA? No, this was different. This is an American one, but yes, same. Yeah, red flag, red flag. Yeah. And well, I mean, look, there are small audit firms and they're cheaper and you know, not everyone's going to use the big four audit firms to do their work and that's not necessarily wrong.

43:49there are some decent second tier audit firms but if they're changing orders a lot or if the order is a complete unknown then yes absolutely uh that's something i do i do look at and i am careful of um a couple of guys i work with do it do it you know as a religion um because it's just one of those things even if it's not a red flag it's a question to ask and you should be more cautious uh just in general if the order is less recognized or recognizable just realize that maybe there's nothing going on or maybe there is, but just keep that, keep that a little bit, you know, a little bit careful, a little bit close.

44:23Yeah. You know what, you know what I would say too, is you'd be surprised at how much you can sniff out shenanigans. You know, it's the old, the old saying is, what is it? Profit is vanity, cash. No, what is that? I'm going to get it wrong now. Revenue is vanity, profit is sanity, cash flow is king. Yeah, exactly. And so when it comes to, and this it's not because there's any necessarily funny buggers going on, but you can, there's a lot more discretion when it comes to sales because I can, well, when do I record that as happening? You know, what costs do I allocate and how? What reporting, you know, there's legitimate reasons as to why some things could be debated.

45:09Cash is cash is cash is cash. So unless there's an outright cooking of the books you know you can when you start to see a very big divergence between sort of what statutory reported figures are and uh cash flows you'd be surprised at the things that can be picked up you get some really good comments on straw man i'm going to give them some of our members applause it's great to have a big broad brains trust so we've got accountants in there and you know it's like it's really just sort of the the whole is greater than the sum of its parts But it's something that I think anyone is capable of doing.

45:41When you sort of look at these things, when you start to see very big disconnects there, again, not that something's going on, but it's a red flag. And when you start seeing, generally red flags, they're like cockroaches. If you see one, there's more often, right? And it's something that you don't need a smoking gun to act. I think a lot of the time it's like, look, I don't know one way or the other. I can't definitively say, but there's enough here where I can put a serious question mark over it. It's like, why am I taking this risk for? Again, I've got this luxury of choice. I do find it interesting.

46:19Let's not go down this rabbit hole, but given everything that's been revealed recently with the big four auditors, I was like, you know, how much trust do you need to have there? I mean, there's issues. issues. And I also find it interesting that I noticed this in any kind of capital city that I go to, you go and you look at these big glass fortresses, the towers, and they're always the big banks and they're always the big auditors. And the consultants, yeah. If I was an alien coming down and it's like, we were walking through ancient Egypt, you know, we would look at the biggest building and that's where the power lies, right?

46:55And our modern society is like, that's where the power lies, the financial companies and the auditors. And that's, that they're somehow affording the best, you know, houses on the block there. And they, humans being humans, they, you know, things get pretty tight there. And it's a little bit concerning. So I'd always say, be your own auditor as best as you can. And just sanity check everything. Yeah. The good thing is the auditors get to see what we don't get to see. We can't go and look for the invoices. We can't check the bank accounts. That's stuff they do do that we can't. I'm sure that'd be divorced from the big four, Louis.

47:30yeah they should um yes there is there is uh do you know what 99 % of the time it's not necessary the other 1 % of the time it's really important and we don't lose anything by doing it you know individual companies lose out because they might get yeah even at the very least there's economies of scale if you're big you're well known your brand's well known you get benefits doing both if you're less um ethical maybe you're you know throwing money one way or the other as we saw with allegedly allegedly um some of the big consulting firms doing government work allegedly allegedly um and i think there's you know there's there's enough there to suggest that if you give people the opportunity and the incentive we shouldn't be surprised when people take it and it's a really really really really easy thing to do simply to say no you can't do both because it's better for us that we remove the temptation that if it's never taken then we don't lose anything you as a as a The audit firm might lose a little bit because you can't leverage those economies of scale or the brand benefit, but that's your problem, not ours.

48:29And that's okay with us as a society. We've chosen to make that decision too. You can't make every dollar you would like to make because there are rules. And that's one of the rules that just makes obvious sense. Same with bringing up contractors. You shouldn't be allowed to consult to government and private enterprise for what it's worth. Do one or the other. Choose your boat. If you don't like it, don't do it. That's easy. Same with audit firms. It should be the same, by the way, with banks. They should have to separate out their commercial and investment banking business and derivatives trading from their stock.

48:57Oh, my gosh. Is that not the biggest no-brainer ever? It's super, isn't it? Yeah. Just do it. Easiest thing in the world. I'll call that bluff any day. Oh, we can't do that because of it. Oh, okay. Don't do it then. Just like, we'll take your banking license away. You're here to serve us. Correct. They just say that. And that's lobbying for you. No politicians just change that because they thought it was better for anybody. They changed it because I lobbied to and they gave into it rather than actually saying, There's no reason to do it here. Oh, man. Yes. No, I think that's - It's hard to, isn't it?

49:27I do understand the concentration of power amongst the auditing firms because if I was the CEO of an ASX 200 company - Yeah, right. And I go, you know what? We're going to try and save a few bucks because there's this perfectly decent mid-tier firm over here. They're really good, perfectly trustworthy. Yep, yep. And we're going to save our shareholders a bunch of money. No, because whatever goes wrong, I am never going to get in trouble for choosing PwC. Yep. I'm just not, right? Because the old saying is no one got fired for hiring IBM is the old saying. And it's just they are rightly or wrongly regarded as best in breed and you're just going to do it because that's just what you're going to do.

50:07And even if the other people are better, more skilled, more competent, better value for money and the rest of it, the moment that CBA says actually we're not using PwC anymore, everyone goes, whoa. What? That's exactly right, yes. What's going on? And so you kind of, but again, like that is the incredible privilege that you enjoy. No one designed it that way, but it evolved that way. And here we are. And, you know, it's, I don't know. It's just a bit depressing. A hundred percent, a hundred percent. Hey, this is a great question we got from Hugo. He says, morning gents, I've got a few quotes to set up my question on innovation.

50:43They'll hopefully get you very Sunday morning ranty, he says. We're already in a ranty mood. Bring it on. Well, it's a two-part question. So, Clippy, he says. Quote number one. Quote, being too early is indistinguishable from being wrong. Quote number two. This is an Andrew Page special. Very slowly, then all at once. Quote number three. It's different this time. Hugo says, I work in tech, and I generally invest only in ideas with a five to ten-year time horizon. considering iteration cycles on our days and weeks not months and years how do you consider stock picking outside of the picks and shovels plays in a market that is evolving at such a pace and the second question is how do you quantify the network effects of mega incumbents when comparing them to their younger competitors really really great questions you go so around you first mate how do you you're you've just talked about the fact you're 51.3 i think you said percent in technology um how do you how do you approach that uh given i completely agree um david gardener the motley falls co-founder has said you know 200 years ago um if you were born in you know next to the nile river in egypt you were never going to move your grandfather did the same job your father did the same job you did you'll do the same your son will do the same his son will do the same it was a used male example because it was that that sort of environment back then that society you know you you change was measured in multiple lifetimes you know just and there was industrial revolution and that kind of brought things to half centuries and then you know to hugo's point is now measuring days and weeks how do you how do you approach your investing given that sheer pace of of innovation of growth technology both of the companies you buy and also the potential competitors or or as yet unknown competitors that might simply spring up So hard.

52:34Howard Marks made comment. I've referenced it a few times. I really respect him. He deserves more notoriety and he writes, he's a bond investor, but he writes a lot of good stuff. He wrote probably 18 months, 24 months ago now that the pace of change is accelerating. And so it's hard, you know, you could have, you could make, we're all crystal ball gazing, right? When it comes to investing. And when it comes to technology, there was a time where you could look at perhaps like the big chip manufacturers or whatever and say, look, they're going to be around for a long time yet. But things change.

53:12The rapidity of change is increasing. So I thought a really interesting example with this whole AI stuff is that Google, which is hard to think of a more deeply motored technology advantaged company. Overnight, the market just went, whoa. And you couldn't use the word Bing without being laughed at. Now, for those who don't know, Bing is Microsoft searcher. Who the hell uses Bing? Like grandma, when she installs the default browser, that's who uses Bing. No one else in the world uses Bing, right? But now they've got ChatGPT under their arm and they're like, we were seriously caught. Now, I don't think this is going to happen in the case of Google, by the way, so I don't want to, it's easy to get off tangent here.

54:00But my point is that we all of a sudden, the world started to very take seriously that Google might actually lose its dominant position in search because of this technology that just like a month ago wasn't being discussed was on no one's radar yeah and and and that is something that makes it very very hard very very hard so what's going to be the next innovation that completely obfuscates the current technology that you're investing in so it has to be something where i i just feel that's less likely but not impossible so there's no way to protect against it um uh so how do you think about then from an investing perspective I like technology products that get deeply embedded into the workflows of their customers.

54:43Right. So it becomes so critical that something doesn't have to be better. It has to be orders of magnitude better for me to even contemplate switching. The classic examples with accounting software. It's like, I use Xero because, you know, why wouldn't I? But if someone else came along and it's like, oh, this is a little bit cheaper and a little bit better. It's just too much of a hassle. I can't even change brokers because I'm so lazy. And I've got a million plates spinning in the air. And you want me to change my accounting software? And the software that I like is that kind of stuff. And I also like, I think when it comes to tech, the big things have been stitched up by the big players.

55:24You know, no one's disrupting the really big, well, talking about both sides of my mouth, it's very difficult to disrupt the big players in the big areas of tech. I really love the niche areas of tech where they're doing technology that it's just sort of like the market is just way too, it might be a hundred billion dollar market, but it's just too small for Google or Microsoft or Amazon or Apple to even bother with. Even if we win and we win the whole market, it's not worth doing. So there's literally four or five tiny little players around the world that are doing it. And they're so small today and the opportunity is so large.

55:57And there is a structural industry-wide shift as to moving onto this new way of doing business or this new, that they can win that and only that and nothing else. And still there's incredible upside potential. I also like things too where I think where technology will change, this comes back to the AI, as you can tell, mate, I'm not short of an opinion on this, but I think where there'll be a big bubble in AI, but there'll be legitimacy at its heart. And I think what you want to do is remember that AI can be pointed towards anything. I've even had a little play around the show off the me and the devs at straw man.

56:37It's like, Oh, we could do that. We can, we're not developing the large language model, but we're just off the shelf and pointing at it stuff. Right. If you've got a company with proprietary data, that's pretty cool. Right. Like you, the technology can change, but these things generally rely on good quality data. And if you own the data, I think that's a nice little thing to have as well. And more broadly, I just diversify, right? Because I know that things are going to unfold in ways that are unpredictable. And I also know that these are the kind of games I play where it's like, well, I only need one or two kingmakers and the rest can go to zero as far as I'm concerned because that is how big the reward is.

57:20And I'm just not going to bet it all on black, you know, Wesley Snipes style. And I'm just not going to do that because I know that no matter how high conviction it is, things can really change rapidly. So spread it around a little bit. Try and go in areas which are more difficult to disrupt and just be hyper alert to new things that come along. And not that you're going to jump at every shadow because that's a sure way to not capture any long-term multibaggers, but be alert to it. And, yeah, that's probably the short answer. That's the short answer. That's the short answer. Hey, I can't have much more to you, so I'm going to do it very quickly.

57:56i i don't think you need to be that i don't think you need to approach it actually that much more differently because there's two things going on the first is you need to work out the direction of the business and then you need to work out with the share price is reasonable for that business and i think you know i mentioned the industrial revolution you know i've said before you know you build one steel mill it works and after 15 years you say you know i might build a second one out of five years it's built now if you build a third one in five years later than that eventually in a century, you've got most of the steel mills in most of the areas in most of the country.

58:27But that's how long it takes. Now, this happens much more quickly, which is fine, but so do the share prices. So because you couldn't scale a steel mill, there was no real massive, huge upside potential that was going to come and overwhelm the share price. So I've seen tech fortunes made a loss in really short periods of time. So a quick one, I think you take the same approach you still say i think this is a 10-year winner and if it's not after a year and a half you sell it i don't mean that to sound flippant but you know we've said before you buy to hold not buy and hold regardless of the circumstances so if you you look for the same things you may have to be more vigilant to see them happening in in effectively real time rather than every annual report with these get a little bit better so customer uptake sales growth recurring revenue all that stuff you see that happening that's probably what you're looking for um and you're probably should be a little more alert to it particularly in those sort of industries where disruption can happen quickly i will say in terms of your network effects question mate um how do you quantify it firstly i don't try and quantify it and i know that probably you're a technologist so maybe maybe quantification and you know using the maths of it makes sense to you um i think what you're looking for for me you say you say the incumbents versus the younger competitors.

59:44What you're really looking for is continued growth and or decline. So Telstra was the only game in town until Optus turned up. They could only lose customers at that point. So you're looking for evidence that a company is losing customers or losing usage. A simple example, you know, MySpace got absolutely trounced by Facebook. And Facebook, despite, you know, insta which is then bought despite whatsapp despite you know wechat despite tiktok snapchat insert others here um threads twitter is it is it is it the is it the dominant sorry is it is it the massive growth business it was when it first took over myspace no is it still really dominant despite the fact everyone laughs at only our grandparents use it this is still a massive massive incredibly profitable business and so you also write those things off at your peril right so So I think on the way through, if you see them taking more and more customers, you're in a good place.

1:00:45I would personally very, very, you mentioned Google before, Ram, I would be very careful not to write off the incumbents too quickly. But I would look at the growth of the other guys. And as they come up, again, take that seriously as well. What you're looking for is momentum, compound growth in use, monthly average users, daily average users, active users should say, you know revenues all those things you're looking for you actually want to see that and as long as you're seeing that the price is reasonable you don't necessarily have to pick the winner or the only winner right you can kind of you know if you like tiktok's growth then buy the shares even if facebook remains bigger than for a long time if more and more people keep using tiktok in larger and larger numbers it tells you exactly what you need to know which is there's a more relevant platform for more people more often that generally is a good place when it becomes less relevant less frequently then you're going to start to wonder whether you know it's it's jumped the shark but in the meantime i really wouldn't overthink it i wouldn't try and be too active i guess that's our last thing don't over think it don't be overactive don't try and second guess every zig and zag be directionally right for long enough is probably my best idea yep and and i'll just i finish up by saying that what will happen is even if you're right in all of your process is that the share prices are not going to reflect the fundamentals accurately.

1:02:04So here's what I think about a lot. So if I owned a share and it goes sideways for three years, it does nothing, and then it doubles on the fourth year, my compound annual growth rate is 19 % per annum. Now, on the day before it doubles, and that's what happens, like just going back to that initial quote that the listener threw at us, that, you know, just nothing. And then all of a sudden, which is that's how it tends to go in this kind of space. And what am I missing? What's going on? Nothing's happening. And like, well, I have underperformed the market for four years and then bam, I'm massively out in front.

1:02:38That is what to, is that even when every metric you're looking at is going right, you'll be hitting your head against the wall going, what am I missing? Why is the market? Stay true to yourself because it will eventually come. And then you've just got to be disciplined enough not to be so tempted and relieved to sell and lock in an easy profit. That's so totally it. That's so totally it. Just, yeah, look, love innovation, follow it with interest, divorce the excitable consumer and for you probably Hugo technologist, part of your brain from the long-term investor brain because these things, yeah, I mean, even Amazon, even Google, I mean, how quickly are fortunes really?

1:03:18Tesla went nowhere for five years. Facebook, I mean, you know, it'll happen. Nvidia's probably been the one that's really gone. Even then, you've had five, seven, ten years to get onto a business stock that's crippled the shit. You can be late. You can be late on the quote-unquote late and still do extraordinarily well. The people who do the best on, I don't know, pick an example. I'll go with Facebook because you mentioned it. With the people in the dorm room with Mark, right? Like they did insanely well. But the people who waited until it was listed on a public market missed out on – remember, it listed at a PE of 100.

1:03:48That's what I did too. And a couple of years later, I think you were up 200 % or something. I haven't looked at it since and for a long time. But my point is, is that when you have ones with incredibly entrenched positions, which are executing well with long runways, you can be late and still do. In fact, from a risk reward proposition, it's actually a better investment. On that note, I think it's time we let our listeners enjoy the rest of their Sundays. Now they know what straw man is and they've heard us chat and rant. Thank you for the opportunity. And we got through two whole questions, maybe three.

1:04:23Four or five, I think. Oh, wow. Okay, okay. Well, maybe four. Send us in your questions, though. Please send us the questions. You know how to get in touch with us. Fool, sorry, info at fool.com.au. Follow Andrew on Twitter. Yes, I'm going to keep calling it Twitter, Andrew. At sage underscore simia at strawmaninvest. You can get to me on Twitter or Insta or threads at TMF Scott P or The Motley Fool AU and Facebook at facebook.com forward slash Scott Phillips money. Send us your questions. Send us your comments. We love them and we've got plenty to get through next time we meet. Well, not next time.

1:04:56Next time is Friday. But next Sunday, we'll do our mailbag again. Until Friday, Fool on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.