The cavalry isn't coming: UK stocks, relistings, and AI analysts | with Ben Isaac, Brizo Capital

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0:27All right. Hello, and welcome to the Yet Another Value podcast. I'm your host, Andrew Walker. Today's episode, we have a really fun one. One of my favorite people in the investing business, one of my favorite people in New York City, my friend Ben Isaac from Brizzo Capital. We have a wide, wide-ranging conversation. Ben teaches at Columbia. He's a hired intern. So we start off talking about, hey, AI, how is it changing the analyst role? How is it changing the internship role? How is it changing their jobs, their outlook, all that sort of stuff? And then the thing Ben and I have bonded the most over historically over the years is corporate governance, UK markets, and we're going to talk all sorts of things, corporate governance, capital allocations, UK markets.

1:03At the very tail end, we talk a little bit about the South Korean market reforms. So we just have, you know, Ben invests internationally, and we have a wide range, a world-ranging conversations on all things stocks, AI, investing, capital allocation, corporate governance. So we're going to get there in one second. But first, a word from our sponsors. Today's episode is sponsored by Trotta. T-R-A-T-A dot com. Look, I've been saying it for the past 12 months, 18 months, whatever it is. If you like this podcast, you are going to like Trata. Why? What is Trata? Well, Trata is two buy-side investors who hop on an anonymized call and they talk about a stock that they're interested in.

1:39Generally, it's two investors who are long the stock, but sometimes it's an investor who's long and short. Sometimes it's two investors who are thinking about it. But you're going to hear from, they hop on, they talk about it for about 60 minutes, and then Trata anonymizes the transcript and publishes it on their website. So when you get it, you can go read and see what investors who are actually thinking about investing in a company, what they're really talking about, how they're thinking about the overall space, how they're thinking about the risks, rewards, opportunities, opportunity costs, all that sort of stuff.

2:05So again, if you like this podcast, this is going to be a match made in heaven with you. I love to try it. I love it. Trata.com, T-R-A-T-A.com. Thanks to them for sponsoring this. And now onto the episode. All right. Hello, and welcome to yet another value podcast. I'm your host, Andrew Walker. with me today. I'm excited to have one of my favorite people in the whole industry. I finally got him on, my friend Ben Isaac from Brizzo Capital. Ben, how's it going? I'm doing well, Andrew. How about you? Doing great. Super excited for today. Before we get started, disclaimer, remind everyone, nothing on this podcast is investing advice.

2:37Full disclaimer at the end of the podcast in the show notes. Always true, but Ben and I have a lot of things we're going to talk about, and a lot of them are in international waters, so maybe particularly true today, but you can see the full disclaimer at the end. Ben, if I can just set the table, I think we're going to talk about a lot today. You have a lot of different seats. Obviously, you're at Brazil Capital. You teach a class at Columbia. I believe it's Applied Securities Investing. You can correct me if I'm wrong. But I want to talk to you about so many things. But to start, your class is you're teaching, again, correct me if I'm wrong, first year MBA students, how to analyze a company, spend a semester diving deep into a company.

3:14A lot of these students are looking for jobs in an internship or analyst role. And some of them just want to go in investing and some of them just want to go out into the world, but have like a capital allocation and investor mindset. Past three years have been crazy AI and everything. And I'd love to just talk because at Brizzo, you've had 30 interns. You're training all these people through the class. How has the analyst and internship role kind of been evolving over the past few years as AI has come in? If you'll give me a five minute intro set up for that question. Yeah. And by the way, just to acknowledge, you know, so the course I teach, Applied Security Analysis, it's there are two other professors as well.

3:53Evidence Act, they do great work as well. So I wouldn't want to make it sound like that's just me. But between the internship program and the opportunity that I have to work with these students, I do think maybe we've got something interesting to say about that. But there's a few different ways to approach it. So first of all, there's this inherent tension where these are young people, they're motivated, they want to get something that looks professional looking as quickly as possible. But there's a real tension between having Claude or whatever, helping them do the initial analysis versus doing their thinking for them.

4:35And that above everything else is, I think, at least for now, where that tension is, because, you know, I know that you like hitting the gym. If you build a machine to do the leg press for you, you're going to be able to put a lot of weight up and down on that machine. But it doesn't make you any stronger and it doesn't make your form any better. It doesn't make it's not helping you personally. It's a cool machine you built, though. And that disconnect can be hard for some students because they're thinking, and I think understandably, that, you know, people are evaluating them on work product.

5:07And of course, an element of that is true, but ultimately this is about quality of thinking. And to date, while I believe that these tools are essential and it's very important that the students do learn how to use them and use them well, when they're outsourcing their thinking to it, that's where you often wind up seeing the disaster scenarios. And that temptation is hard and it all works on a gradient. But ultimately, when these tools are being used to help gather clean information, find alternative sources, slice data more finely, do things like Python scripts or big informational scrapes to do the kind of due diligence work that was historically incredibly time consuming and painful.

5:50And now I don't want to say that it's easy, but it's infinitely easier in terms of the amount of man hours that you're putting in. That's just a huge unlock. And so I'm really proud of the work that the students do. It's ultimately that's them. It's not, you know, I'm hoping that the professors are value added. But what we really try to preach is be prepared to use the tools, but simultaneously be very specific about where you're using it. Disclose. Don't be cute about saying, you know, was Claude or again, whatever, involved or not. And have it focus on pre-chewing information as opposed to digesting information for you.

6:30And when they get that balance right, what we found is that definitionally, it's a course of 70, 75 students. So there's people coming from all sorts of different experience levels. But the median quality of work has come up so much. Again, hopefully the pedagogy has helped with that. But I think also the way that students are using these tools has allowed them to accelerate their learnings. And for me, the proof in the pudding is when I actually speak with the teams and we do spend a lot of time actually talking with them and not just sort of, you know, evaluating deliverables. The quality of thinking on average really has improved.

7:07For the absolute best pitches, are they materially better than they were four, five, seven years ago? I don't know. I think there's some really good work being done in the course five years ago. We're about to do our 20th anniversary of the course. So, you know, it was a relatively established course when I took it in business school, you know, 12, 13 years ago. And this is light years better than before. And I do think these tools have contributed to that. but there's still, but these are still not a substitute for investment judgment. I mean, absolutely. And I do think you'll, you'll hear a lot of people say, Hey, these tools are great.

7:45You know, if I sub stack, I get a lot of people come to me because I've got a sub stack and they'll be like, I'm launching a sub stack. And the quality of writing is really good. And then when you talk to a lot of people who are just starting, you'll realize, Oh, you had an AI, right? This whole thing for you, you had. And as soon as you start pushing back or asking questions, they've got nothing. So I think you're right. Like the quality is going up, but the judgment piece is still maybe the judgment piece still needs to be developed. Let me ask slightly differently. Like, again, you've hired 30 analysts at Brizzo.

8:15A lot of people going through your class are looking for internships or analyst jobs in the investing community. Four years ago, if you and I had this conversation, there was no AI, right? Nobody would have cared. I think the past, probably last summers, was the first time where AI would have been like a bedrock of an internship analyst role, what people were looking for. How is that evolving? And kind of whether it's just broadly when your students are looking at analysts and internship roles, what are they saying? You know, firms are saying this is what we want in an analyst today versus maybe three years ago or what a lot of people might still think an investing analyst role looks like.

8:52So that's all over the map, because both in terms of just the general acceptance and skepticism of the tools is hugely variable depending on the firm and its mandate. But then also compliance is a big sticking point in a lot of places. So I know a lot of firms that I think do great work, but because they're large, they're concerned about compliance. And they don't have an IT architecture that allows for different structures that allow you to use the best tools. they're still stuck on things like Copilot that really don't have the same kind of horsepower as a Claude. I vomited my mouth a little bit there when you said that.

9:31Yeah. And like, hopefully, Copilot, you know, gets way better. But, you know, at least today, there's a night and day difference between the best tools and the rest. So if you're going to a pod shop, they've got amazing tools, and they've got amazing data and amazing data cleanliness, so that you can actually really do stuff with it. But if you've got, you know, access to a Claude account, hypothetically, but you're not allowed to put any files in, including company files, obviously work product probably needs to be sensitive. Clearly client information, things like that, that can never touch these things.

10:05That all makes sense. Someday maybe the enterprise licenses will work that out. But when you're not even allowed to basically have like a central drive of all of the company documents that you have and a whole bunch of Excel and maybe, you know, expert network calls and things like that, that you can, that you can have your, your agents access, the power of these tools goes down dramatically. And so a lot of this winds up becoming very enterprise specific. And so everybody wants their, their new hires to have a lot of proficiency with this, but they're not always yet in the place where they can adopt best practices.

10:39And particularly at a number of firms, there's still a lot of skepticism, whether it be around hallucinations or data security. I'm sympathetic on the data security point. We think a lot about that. But even just simply like to what extent can these things be meaningfully value added beyond Google? And in fairness, if they are totally disconnected from everything except the raw internet, there's actually only so much better than Google they can really be. They can still be an amazing time save, but it's just radically less powerful than if you can feed incremental context to them. You mentioned hallucinations, and it's just funny.

11:15You and I have talked about AI a lot. A year ago, roughly, I would say hallucinations was a big concern for me, where you'd put something in and it'd say, hey, four R's and strawberries, or the classic legal cases citing fake liggas. I'd say over the past six months, my concern over hallucinations, not that I'm not concerned that it feeds me a fake thing but it's gone way down but when i talk to someone who maybe hasn't been spending as much time with like the co-work and the ai agent stuff like hallucination pops to the top of their list and it's kind of way away just for me if somebody's the first thing they say is what about hallucinations like oh you haven't really been playing with this that much or you you're you're a little bit further behind and not that that's bad right maybe maybe it's better to the old analog thing like you know i'm sure you and i came up around the same time still building models by hand.

12:03Yeah, it's slow versus just having Bloomberg import everything, but it does teach you something and force you to slow down and think a little bit. Maybe skipping the AI is good or something, but if hallucinations is your thing. Just one more. I mean, you've got a class of 70 to 75, right? Not that that's an infinite end, but it's a much bigger end than my sample set. I would say 10 years ago, 15 years ago, there was a lot of worry. You know, the mutual funds were shrinking, stuff that fundamental investing roles were going away and not that they're easy to find. five years ago, I'd say stuff. I'm not sure what this date is.

12:34You could tell me, hey, AI is exploding the demand for analysts and interns, or you tell me, hey, AI is replacing analysts and interns. Just broad strokes, where do you think the demand for this set of crops and interns analysts is setting? For now, people don't know. And I think at least for now, the main pressures are way more the economic pressures that large organizations that historically represented the bulk of seats as you're seeing feet compression or AUM challenges. There's only so many seats that can go around. But in the fullness of time, and this is perhaps a hot take because I know it's obviously very controversial, our view is that AI actually materially expands the need for good quality analysts.

13:19And the analysts still need to have the fundamentals in place so they can meaningfully push back on the models and understand what good work actually looks like. But to me, what this puts a premium on are people who can go out and get differentiated information, whether that's going to a trade show or doing value-added research, whether it be expert networks or otherwise, that are above and beyond what everybody else has access to. That's unavoidably time-consuming work, and it requires someone with judgment, finesse, people skills, EQ. And the more people you have doing that within reason, I think the more that you're able to build a sustainable edge over time.

14:00One reason that we really like having interns at Breezo is that these are young, motivated people, often with a different cultural context, because we hire a lot of international students over time for internships. And that allows us to get very different kinds of people on the phone. That allows us to have very different kinds of industry experience and perspectives. And if you're pretty much locked into, you know, a database of expert network calls, as much as that's a unlock versus the way the world was before, it's ultimately a quasi commodity, particularly as ultimately all organizations start to get comfortable with the idea of feeding that stuff into a context window, albeit maybe it's going to be co-pilots and not clods um and so i i ultimately think that this uh increases the value of the incremental analyst because the stuff that you really need people for is the kind of thing that senior people sometimes haven't been trained on because that value-added research has really come to the fore in the past 20 to 30 years as much as phil fisher wrote his book so long ago um uh but also just frankly being a young, energetic person with the amount of time flexibility.

15:10People, I think, often underrate the amount of just time that a senior person is locked into investment committees, the administrative stuff of sitting at a large asset manager. And I'm sympathetic to that. That doesn't make them bad at their job. They've met many of these people and they're amazing. But they definitionally have less time to do on the ground scuttlebutt. That's the kind of stuff that through no fault of the of the models themselves, they'll never have access to. It's, I mean, you just hit so many things and I just couldn't agree with you more. Like on the time thing, you know, you and I, we both got kids and you started to get the grays in your hair.

15:44And when you're young, you know, if I was looking at a company, I'd fly over and go visit them. Or if there was a big trade show and like, yes, there's institutional committees, but you get older, there's the kids and there's the family. And like the analysts who can just go on a whim and visit a trade show. So, I mean, there is a big time component. And the other interesting thing is AI, you hit on trade shows. The past few Pershing Square Challenge winners, I've been lucky enough to have them on the podcast. One thing I've said or one thing I've said to people who are applying for jobs, go get a picture of yourself at a trade show.

16:16Show you're willing to put that on the ground research in there because that's unique data. And I don't think it should be lost on anyone. Like the winners do that type of stuff, right? And there's lots of reasons for that. But that's the type of unique data that I think gives you an edge. And in an AI world where the AI can go filter it out, like if you go to a trade show and you get a unique piece of edge, you know, 20 years ago, okay, maybe we short all the home distributors if the home distributors are all in distress. When you put it into the AI, it could find a thousand trades in a hundred different markets and automatically get that off your data.

16:47So like maybe the edge gets smaller, but it gets applied over more things and there's more premiums that unique information. Like that just seems very, very, very much where the world is going to me. And that's why whenever these analysts talk to me, they send me a pitch. I'm like, dude, a photo of you at a trade show photo of you. If you're a CEO hard hat, it's a short indicator. If you're an analyst or an inspiring intern and you've got a hard hat photo, that's a, that's a buy signal. That's a job offer signal. So yeah, I just couldn't agree with you more. It's one of the things that I preach both with Breezo interns, but also in the class.

17:22and maybe this is a commercial for Columbia interns and MBA students more broadly, while you're a student, you have a superpower that a lot of people actually want to get on the phone with you. Most people don't want to talk with Andrew and Ben unless it's coming from a warm reference or we're already a known quantity or there's an appropriate social context. But if Andrew and Ben basically hit up some random stranger in an office building, people are going to be asking what the, you know, what the heck are you doing? That's how we got banned from the 250 park bed. Exactly. Um, no, but you know, when it comes to, you know, the average MBA student, if they basically come in saying, and rightly so, by the way, uh, we're doing a project on X, uh, XYZ company.

18:03Um, we're trying to learn more about the following things. Uh, it seems like you're really in a position to know a lot about that. Would you mind taking 15 to 20 minutes out of your day just to speak with us so we can do our research? And we're happy to share some of our findings with you on the other side. And while not everybody's going to say yes, the hit rate on that is pretty good. And you build a network as a student and you can really come up with differentiated information that most people are not going to be able to come up with, even with a very large research budget, putting aside the time arbitrage point that I was making before.

18:35And so the students that wind up really embracing that, we think it sets them up really well to distinguish themselves in the challenge. But it also, I believe strongly, and I think my fellow professors would agree, it really builds an important skill set for afterwards, that that willingness to cold call, and, you know, frankly, get people shutting doors in your face, and not taking that personally, is very powerful in terms of being able to get differentiated information, just in terms of context. My wife makes fun of me so much, because 10, 15 years ago, when I met her, I'd be like, she'd be like, hey, let's go here and be like, that's a networking event.

19:12I don't want to go network or I don't want to go do sales and stuff. And then as you get older, you're like, hey, maybe you're not like making hard timeshare sales commissions on something, but like your whole job as a person is sales, right? Like that is part of your job. And like, you just have to know. And to your point on getting the door slammed in your face again, yes, they're not getting timeshare commissions, but if they're just willing to get on the phone, and by the way, as a student, there are CEOs who will spend 10, 15 minutes with you who expert networks, What's the going rate for an expert network?

19:41$750,$1 ,000 per hour. CEOs don't even do them, right? And XCOs will charge$5 ,000 an hour sometimes. You can get that for free as a student. You can get access that is literally priceless. And yeah, it's just one of the reasons, again, stock pitch contests, all these sort of stuff. People, they want to write things and say, hey, this company trades for 10 times PE and the peers trade for 15 times PE. It's like, that's fine. But if you're a student, if you just go, hey, I got five minutes on the phone with this CEO and he said we're going to the moon. that that's a bigger edge and that's a bigger signal than anything else I'd say you could get yeah and by the way you know one of the reasons that having those basic skills as an investor as an analyst isn't going to expire is that you still need to understand what's actually relevant what are the load-bearing components of your thesis these people who do massive write-ups and I really admire it in some ways but we're a big focus on and I'm being a little bit dismissive but you get the point of what I'm getting at.

20:38You know, I know the name of the CFO's cat. Like, that's really impressive that they're able to dig up that information. But is that actually going to be meaningful in terms of driving outcomes? Probably not. And so understanding what's really relevant still puts a premium on skill in terms of the questions you ask, who you choose to speak with, who you choose to reach out to. And relatedly, if you seem like you know your stuff, it unlocks a totally different level of conversation when you're getting people on the phone. completely let's hard switch to the thing that i think you and i have spent the most time bonding over the past couple years and that is corporate governance and uh i'd say corporate governance slash uk listed stocks but let's focus on corporate governance uh and we can actually do the uk and use it to broadly unlock but i think both you and i as value investors have seen like if you're an ai stock if you're a stock with a lot of momentum you get a full multiple people over there.

21:32If you're a sleepier stock, that's kind of more in the, hey, we grow at a nice rate, we return capital, that sort of stuff. A lot of these stocks have been left behind. And we felt I'm going to steal a term you taught me. The cavalry isn't coming to save us. We need to save ourselves. And these companies have not helped themselves. I think that's a lot of the decry on corporate governance. But I'd just love to talk to you a little bit. When you're looking outside of these indices, you spend a lot of time international. What's the state of corporate governance? How are you engaging with firms, all that type of stuff?

22:00Yeah. So it's a funny global set of global markets. We have a very global mandate. We're very fundamentals driven. So we're trying to find genuinely, compellingly cheap stuff around the world. And we're obviously where they are in the world and what they do is going to inform what we think of fair prices. But we're within reason, pretty agnostic about where they are, assuming we think we can underwrite it and be treated fairly. And that treated fairly is not a trivial consideration, incidentally something you and i've discussed a ton yes it's funny internationally could be treated fairly where oh you know the the local shareholders make away with all the money or treated fairly could be oh the local shareholders took our assets and anyone on the ground was tossed in jail yeah i mean that's on the extreme end but yeah there's a huge range of things you want to be mindful of when you step outside of of one's borders but although i would also argue that politics are becoming more relevant in US investing as well and developed markets investing.

22:58And maybe that's a good thing in some ways. I don't want to presume your audience's political priors, but in a world of, for example, tariffs, that changes the math on the ground for a whole bunch of companies that may be good or bad economic policy. And that's a totally separate discussion, but it has real, the politics have real consequences for the economics of businesses. It's one thing that I've, you know, you have to put your politics aside and you just have to, like they are a reality, right? So you can like, as you said with tariffs, you can like tariffs, you can hate tariffs, but they are a political reality.

23:26And if you were just gonna invest and ignore that there are tariffs, cool. You went along some steel companies and now they're maybe bankrupt or maybe you went along the steel winners and they went up with some, but like you have to at least acknowledge it and think through how it changes the landscape. For sure. And so when we look globally, it is in our view, very easy to find statistically cheap companies, even sometimes statistically cheap, pretty good companies, when we look with a global lens. And we're not saying every company is cheap. We're not saying that every company is necessarily good.

23:56But there's a meaningful fraction where there's a nice, maybe even a very nice business at what we think is a nice to extremely nice valuation or very attractive valuation, I should say. And you see a lot less of that in the U.S. It's still definitely available in the U.S., but the U.S., with the exception of maybe Australia, probably India, maybe the Nordics, it's really the only robust, well-functioning set of equity markets in the world at this point. And obviously, U.S. market cap is 70 percent global market cap, give or take. So, you know, it's not like we're talking about a trivial thing that the U.S.

24:29is the best functioning equity market. But there's real knock on effects in a world where there's, you know, 40 ,000 publicly traded securities and the vast majority of them trade outside of the United States. So we kind of like that that hunting ground, per se. But then there's a question, what do you do about that. And it's not a cookie cutter answer, but we, you know, you and I have talked about this a ton, but the corporate governance piece is so important because the reality is, is that a lot of stewardship questions, not necessarily coming from malice, incidentally, hold back a lot of these companies from getting a better valuation.

25:01You know, you talked about a good business in another jurisdiction returning capital or even a cheap U.S. business returning capital. If they're doing that, that's great. And I would sort of anticipate that most of the time that valuation within a reason, at least, is going to work itself out broadly. But really fundamental blocking and tackling things like disclosure, compensation, incentives, and crucially capital allocation, there's a really evolving conversation that's happening around the world. Japan is probably the one that people are most familiar with, with all the corporate governance reforms that are happening there.

25:34But there's a bunch of different markets where this is a live discussion, we are most attracted to the UK just because these are often big global businesses that are not really tied to the UK domestic economy. Not that the UK domestic economy is going to be bad for forever, but it's just a very different bet that Jeff done to write at that point. And where in the event that the business isn't able to find relevant support in public markets, either in the UK or elsewhere, there's a really logical and deep pool of strategic and private equity buyers who can buy it because it's English language. These are often have close commercial ties already to where the big pools of capital sit in the United States and Europe.

26:13And the rules of the game are similar enough that, you know, getting to that point is relatively actionable. Whereas if you're looking at, say, you know, a Southeast Asian company, there could be amazing opportunities there. And we've looked at a bunch of those, and we don't even own a few. But it's just a very different set of rules on the ground and where you're at a very different point in the corporate governance evolution discussion. So actually sitting down and explaining to companies, these are some things that would be a win-win. We're not asking for selling your prize asset and shutting down the company or something like that.

26:50Sometimes that's the right answer, but that can be a harder discussion. And usually that wouldn't be what's compelling to us. There's so many cases where there's attractive stuff out there where we think that it's, I don't want to say it's easy, but it's very doable to find situations that are win-wins, where you're kind of pushing on an open door in terms of the management team and other stakeholders, where there's relatively easy fixes that are available to the company, and where you can create incentives where management feels like they're being treated fairly for doing things a little bit differently than they were before.

27:23Because let's be clear, for a bunch of these companies at an operational level, the businesses aren't broken. In some cases are actually doing quite well. But if they don't have the right disclosure, if they're stuck in a highly suboptimal capital allocation policy, if they're on an exchange that is just sort of structurally challenged in terms of assigning fair value to them, these are fixable problems. But it does require some number of steps taken to actually fix it. Let me, you hit on a lot of things I wanted to talk about, but let me start with the thing that you have behind the scenes done the most, and I've done a little bit of it, I've highlighted it on this podcast a lot, that is kind of, you mentioned the pushing on an open door, right?

28:06This is generally where you've got a stock that is just, let's just use a UK company, because I think you and I look the most UK company. I think these are the most obvious examples. But I had Sven Larson on recently. We talked about ZigUp and a few others. John Cohen from Zipperline came on to talk about New Gove, slightly different story there. But I've talked about London stocks a lot on this podcast. You've got a London listed stock. Business is international. So, you know, it trades kind of down with the UK and breaks and everything, but it's like, Hey, 80 % of our revenues outside the UK stock is in the doldrums.

28:36A lot of times the board owns no stock. The management team doesn't own a lot of stock. They probably pay a little bit of a dividend because that's all the rage in the UK. And the stock just languishes. You know, I know that you have worked with a lot of these companies on this. I've tried and maybe we've had different views, but I feel like when I talk to them, they look at me and they say, Hey, you're a foreigner, you know, sitting in your little shoebox of a closet coming to us with these ideas. Like you don't understand the way business is done over here. And I'm with you. I'm like, Hey, I want you guys.

29:06I want the management team to make a ton of money. Give them some stock, put them on our side. Stock goes up. We all get rich. I'm okay with that. How have these conversations gone with you? I realize it evolves over time and depends on stuff because I've generally like, I sit here and I feel like I'm about to pull my hair out. Like the companies just don't listen. I'm like, I want this to work for everyone. I don't understand why, like I'm on your side. How have these gone for you? How have those discussions been? Yeah. So it's not one size fits all. We're very lucky in the sense that our capital base allows us to be genuinely long-term and we can kind of prove it with legacy investments.

29:44We think that plus being of at least a reasonable size unlocks sort of a different quality of conversation, where if you can be a one to 5 % shareholder, that changes the contours of the discussion. But the other thing is sort of patience and being selective. So with very few cases I can think of where we just sort of came in and said, do this, we're such brilliant Americans, you should do exactly what we say. They say, oh, never occurred to us on any point of this. They do it. And six months later, the stock is in a different place. That's obviously unrealistic on a bunch of different levels, at least for us.

30:20There's a different style of investing that can get those results faster with some potential trade-offs as well. And maybe that's worth talking about later. But being consistent about that messaging, doing a good job of listening, but also being selective. You know, there's a bunch of companies that are very, I'll say, happy with where they are and maybe happy is overselling it. But there's, you know, only 10 percent of UK PLCs have a requirement that directors own equity that creates obvious cascading consequences for a whole bunch of these companies. Doesn't make the directors bad people, but they're working from a different set of incentives as a result.

30:58But when you find those companies that are, you know, have the opportunity in front of them, um, and show a lot of receptivity. Um, and I, this has to be, uh, combined with a lot of respect and hopefully good listening on our part. Um, building the position as they show a willingness to engage, um, can be really helpful in that respect. Um, and then also understanding that there's some number of companies that feel like they've got it figured out and are going to go a different way. And there may just not be an opportunity to have a productive discussion and sort of saying, look, this one may be cheap, but it may be one to put on the back burner because if we're right, it may take a while for them to get there.

31:41But listening to stakeholders, talking with other shareholders, talking with service providers and talking with multiple levels of a company, what does middle management say? What does C-suite say? Ideally, what does the board say? trying to understand where their challenges and hang-ups are. These are usually pretty sophisticated people in the greater scheme of things. And so understanding where they're coming from and what their blockers are, so whether it be a leverage target that they feel is being imposed by legacy UK norms about what appropriate leverage is, or some hang-ups or misunderstandings about mechanics around buybacks, these can sometimes be gradual education processes.

32:23And that can be a very unsatisfying answer. But that's to us why it's so important to be selective and find those businesses where we think we're getting a really compelling valuation. We think that there's a real opportunity for value to accrete in the core business as we're building a stake. You know, the metaphorical unprofitable steel mill that's trading at 30 percent of replacement value and it's like burning cash. But, you know, if they if they sold it, they could get 70 percent a book or something like that. that's less attractive to us although other people can do that very well because you know if it turns out that's going to be a five-year conversation it's a very different economic proposition than if that same steel mill hypothetically was you know generating a seven to twelve percent roe before they make the improvements it's so funny you say that because you are right but the the the bottom feeder in me you said 30 percent of book could sell it for 70 percent for the bottom Yeah, I'm in.

33:18I'm in. Let's let's go. Totally. You know, there are a lot of things we could talk about. Right. You mentioned the dividend policy, the leverage policy, insider budget. But the one one place that you and I have discussed and I think come out different, a little bit different is the relisting process. Right. And for those who are familiar, you know, you have a company, let's just say a UK company and kind of stuck in a UK backwater. they relist to the U.S. and the goal is basically multiple arbitrage, right? You mentioned well functioning U.S. markets. We can debate that in a second and we might.

33:48But you go from the U.K. where maybe you trade for 5x EBITDA and you come over to the U.S. and you trade for 8x EBITDA. You can choose your numbers. But I've been a little bit – some of these have worked. GAN in the 2020-2021 timeframe was a huge home run for so many value investors. Eventually went bankrupt but you know what what value creation along the way crh was a recent one that uh did very very well when they relisted i've been a little skeptical of the relisting trade because i like it when there's a company with 80 of their sales in the u.s and it trades in the uk and they release the u.s because i can see a reason for it but i i have heard and i understand liquid markets all this but you know if a business has 80 of their sales in the uk and spain let's say If they read this to us, I'm kind of like, what's the point?

34:35Like your natural shareholder base is in the UK. Like it's all over there. It feels like financial engineering for financial engineering sake, if that's right. Now, I know you have data and numbers there. So I'm going to pause there. That's like my overall view of listings. I'd love to hear you because you talk to these companies and you've helped them orchestrate them. So what have you heard and what are your thoughts on them? Yeah. So your skepticism is warranted, by the way. This is not a one size fits all thing. There's a very small number of companies that we've interacted with where we felt that the primary or even secondary plan should be looking at a relisting.

35:04But I would push back on a few things. First and foremost, while there's no denying that getting a valuation re-rate, or as you put it, multiple arbitrage is absolutely part of the appeal, there's a lot of other things that come with moving to the U.S. from some other jurisdictions. So to be really tangible, things like management compensation. It's often very difficult to be competitive on management compensation. There's one relatively large UK company that you and I both know, where they had to pay their head of North America multiple times what the CEO is getting paid, because the CEO compensation rate in the UK is so far below where the market for American talent is.

35:49Now, that might be more of a indictment of U.S. pay, because some of these boards are crazy, but 100%, absolutely. For sure. But going back to your comment about tariffs, this is also the situation on the ground. The reality is that where talent has a market and there's a market price and you're paying below market, it's not to say that people who are getting paid below market are definitionally inferior players, but it's just harder to compete for the best players when you're not able to pay them. And relatedly, when you don't have a well-rated equity, when you don't have, frankly, even from a governance level, the ability to pay with equity, it's hard to attract and retain talent, not just at the C-suite, but below that level, especially for growth companies where there's an entire class of employees, particularly high-skilled employees, at least for now, not obviated by Claude.

36:41that, and by the way, I don't think it ever will. I'm just being a little silly, where there's an expectation of getting equity. And if you don't have a stock that's going to reflect the work that you're doing, it's much harder to use that as a currency. But even at a more fundamental level, you know, you talked about dividends in the UK. Dividends are great for the right company at the right valuation. A dividend is absolutely a very important capital return tool. If they don't have other ways of using the cash, if they've got a stable business, if their share price isn't really, really cheap versus alternatives for the capital, it makes all the sense in the world to be paying a dividend.

37:18But the dividend policy in the UK is kind of trapped in amber from a very different set of facts. And when you've got a whole bunch of shareholders that either are actually saying they want to keep the dividend policy as it stands, or even more challenging in some cases, management and the board are paranoid that that's what they feel, but it's kind of difficult to engage in that discussion in the first place because they're worried there's going to be a leak or something else. Changing your shareholder base actually changes your ability to do certain things, whether that's reinvesting for growth.

37:48We have literally one portfolio company today talks about how what they believe the optimal margin structure in terms of balancing between growth prospects and margin is not optimal versus where their UK shareholders are. Are US shareholders fundamentally better? I don't know, but at least in the case of that business, it seems like the company is better suited having a more international or maybe we can say U.S. shareholder base versus what the preferences are in the U.K. And obviously, those people in the U.K. are entitled to their preferences. But in an international market for capital, there are suboptimal choices for any given business, whether that's leverage levels, whether that's dividend payouts, compensation, capital allocation, margin targets, take your pick.

38:31So I would really push back pretty strongly that this is purely a multiple arbitrage exercise because there are real operational consequences to having a suboptimal listing. And those can cascade, by the way. But let's talk about the multiple arbitrage piece. when you look at the universe of real companies, and we're going to define real companies as businesses that have real revenue, real profitability today, have substance to their enterprise, and are not just sort of a speculative pre-revenue biotech or something like that. It's funny you say that because some of the, you know, there are trillion dollar companies that might come public that are kind of what you're describing as the not real businesses right now, but...

39:16You know, that's another conversation to be had by people smarter than me. But when you take a look at the companies that have relisted into the US, not just from the UK, but from Australia, from Scandinavia, from a number of other jurisdictions, it's really hard to find companies that didn't meaningfully re-rate upon announcement of the relisting and have kept that re-rating over time. And importantly, on top of that, their liquidity has grown well in excess of the re-rate and valuation. On average, on our math, the average UK equity trades kind of the number of shares that they trade per day versus the number of shares outstanding, so call it percentage of shares outstanding, is like a third to a quarter of what a comparably sized US company trades at.

40:08So this is like for like on a market cap basis. And so again, there's real consequences for that in terms of what kind of shareholders you can attract, to what extent you can use it as a currency, to what, you know, if it's a richly valued equity, you may even want to use it for M &A and things like that. And if it's much less liquid, there are people who aren't willing to consider that sort of thing. So again, business consequences, but there's only a handful of cases among the 30 plus real businesses that have relisted to the U.S. over the past five years across a range of different jurisdictions where we can see there being a real sort of failure in terms of the subsequent success of that choice.

40:44And in those cases, it's overwhelmingly companies that got fundamental challenges to their business unrelated to the nature of the relisting. So GAN got itself into trouble, not because of the relisting, but because of inherent characteristics of their business. And guess what? It would have gone to zero in any other market, not just in the U.S. Let me give one pushback here, right? Please. So I'll just use CRH because they were an example, right? Sure. You get a company and they're listed and they announce a relist into the US and they get a pop and their shares get more publicly traded. All of that is great.

41:20But I do think a board could look at you or look at me and say, hey, Ben, Andrew, you're coming to us and you're saying relist to the US and we'll get a pop and our shares will get more liquid. That sounds nice. But isn't that rewarding? Isn't that like a one-time sugar high? Like why should we go for that one-time pop? Would it be better? and again, the boards aren't doing this, so maybe this is too pie in the sky or too rose-colored glass, but wouldn't it be better for us to just buy back our stock at a discount and just keep doing that, keep doing that, keep doing that and accrue all that value for our real long-term shareholders?

41:52Now, again, I don't think a lot of these companies are actually pursuing that, but I think that is a fair bushback. Are you just looking for that one-time sugar high pop versus, hey, wouldn't it be better to just buy back the shares and keep doing it until the market recognizes the value? Yeah, I think that's absolutely a great alternative. The challenge is that with only a couple of exceptions, I can't really think of companies that have done that, at least in the markets that we're looking at today. We think you're going to see more of it. And there's a company that we own today that's doing exactly that.

42:23We're really happy about it. We're pretty happy just to kind of let them cook and just keep that going. But for other folks that are actually hamstrung by sort of a mismatch between the business prospects and the shareholder base, where there are these these talent retention issues, where they're having trouble attracting the relevant investors in the first place because of liquidity. This isn't just a sugar high thing. But again, I would want to stress this is not sort of a one size fits all. We want everyone to do it. But we think that it's worth exploring because in a lot of cases, it solves business challenges beyond just evaluation.

42:59And there are a lot of ways to pursue these transactions where you can have current UK holders benefit from the relisting and not just have the new international shareholders benefit. Let me give one more pushback ahead. All right. So I'm just using CRH because they're one of the biggest examples and they're very tough behind. But CRH does the relisting, right? And it works well, right? You get the pop and the shares perform well, multiple goes up, liquidity goes up. How much of that is the relisting versus is there kind of signal in the relisting, right? Where in the same way, if somebody announces a share buyback, good or bad share buybacks versus dividend, but there might be a signal on, hey, these UK companies don't do share buybacks a lot.

43:41So when someone announced a share buyback, it's really worth paying attention because they're going so against the grain and it's a management signaling. We're thinking about these things. the relisting, is it the relisting or is it, hey, we've got a very biased set of companies that are performing well on the relisting because these are the few companies that are actually thinking about their shareholders and actually thinking, and by the way, maybe their stock is undervalued so they're announcing this. So I guess that's like a chicken or the egg problem, but can we rely on that for the next 20 sets of companies that do this or something?

44:11So I can't disprove the counterfactual. It's totally fair pushback. when you look at these companies that have relisted um they represent a pretty broad range of different industries um and by the way to a point that you made before a decent number of them are not really u.s companies in any meaningful respect in some cases literally they're not u.s companies at all and they're it's not like they're going into the u.s and then aggressively pursuing buybacks or something like that so could there be just sort of signal in terms of operational outcomes or things like that on a go forward basis, it's definitely possible.

44:46But when we look at the set that we have so far, again, call it 30 something companies over the past five years that meet the criteria of kind of real businesses, it's not obvious to us that it was just the people who were hyper shareholder focused and knew that they were playing with a stack deck in terms of their operational outcomes. In a number of cases, it happened after major shareholders pushed. So in the case of CRH, Tryann was pushing for CRH to do it when the stock was around, I think it was 35, 45, something like that. And prior to that, our census was not meaningfully on the board's agenda prior to that.

45:23So it's not obvious to me that that's sort of the strict reason, but is it probably going to disproportionately select for companies that care broadly about good outcomes for shareholders? Yeah, I'm prepared to believe that. So let me hard switch to something else. Your portfolio, I've had the pleasure of talking to you about a lot of different companies, spans domestic, UK, international, or cell phone towers in Africa to UK resource, whatever. One thing, and people who've listened to this podcast for a long time know I struggle with is somebody comes and they pitch, hey, I have the Walmart of Kenya, right?

46:01And it is trading for a huge discount to the Walmart of the US. And I always show because I'm like, hey, yeah, it's great that it's awesome, but it should trade for a huge discount. Like the cost of equity in Kenya is just higher. And one of the tough things with constructing an international portfolio where you've got a cell phone tower operator in Africa alongside a distribution business in the UK is the cell phone operator in Africa is going to have a much higher growth rate and a much higher cost of capital. So when you're operating with a global mandate like that, how are you kind of weighing the two differences?

46:37Because it's just very difficult to have those two things in the same portfolio. And if they're both 5 % weightings, one's inherently going to be much riskier than the other. So how do you kind of think about those pushes and pulls? Yeah, so it's a very important question. And I think part of it is to decompose the components of an international equity risk premium, because obviously, it's not just simply Kenya is X amount riskier than the United States. And so therefore, it's got a 25 % cost of equity versus in the US, it's somewhere between 8 and 11. I'll let you fill in the number. There's currency, which is far and away the biggest risk in a lot of these markets.

47:16But then you've also got potentially government or government adjacent risk versus kind of on the ground operating risk. And which can include things like sporadic financing environments, supply constraints, things like that. And we think it's really worth breaking that down when you're when you're looking at the nature of the business. So I've actually had a bunch of conversations around exactly this topic where there are a lot of functionally USD or euro denominated businesses that trade in an undifferentiated way with businesses that are entirely domestic. And that, in our view, is obviously inappropriate.

47:54So when you can find a business that, you know, we don't own the company, but there's a business in Turkey that owns the Houston Airport or owns the Houston Airport operating concession. Clearly, that's going to move with Turkish equity flows to a non-trivial extent. But is the Houston Airport, does the Houston Airport have a Turkish cost of equity? I would argue definitely not. And that can run an entire gamut. So you mentioned the cell phone towers, for example. when those contracts are overwhelmingly hard currency denominated, when they're overwhelmingly inflation linked, when they're overwhelmingly have pass-throughs on things like energy prices.

48:33Not to say that these are totally riskless operating environments, although we can talk about why we think that's really manageable. But often the functional risk in the risk premium that people sort of optically look at when they look at, say, you know, JP Morgan's valuation versus a big local bank or something like that can be really misleading for a lot of businesses, whether that's, again, a UK business that functionally has all of its revenue outside of the UK. And so, in our opinion, shouldn't have a UK cost of equity or something in Kenya that is primarily producing USD denominated cash crop where it's effectively a participant in the global markets and gets hard currency in.

49:13So we think there's a real art to that. But at the same time, this is not an argument that you should you should basically ignore all those things. You just want to be super clear about what's present in the specific business that you're underwriting versus not. No, it's a great answer. It's just – it's one of those – it's very hard, right? Because on the one hand, if you have a broad mandate, you should look everywhere. But I find it very difficult because the South Korean or the – that might be too – but the Kenyan company is always going to look cheaper than the domestic company, right? But obviously there are risks.

49:49And as you said, you can break them into USD and stuff. But it's very difficult when you've just got such a wide mandate. It's very difficult to not avoid just concentrating into kind of the riskiest areas or perhaps the safest areas. Like there's this whole wide swath in the middle, which I would argue probably UK stocks like that we've been talking about that I think we have shared patchwork probably fall into that middle. And you're kind of like, oh, it's just – it's a very difficult thing. And it's one of the things that made you wonder, like, what's the thing, like, constraints are what creates the best art.

50:19I have been wondering if, like, the constraints have been like, I only invest in UK or I only invest in biotech. I have wondered if that constraint actually would produce more alpha. Here's how we think about it. So you're asking a fairly mechanical question. It's an important one. It's nuanced, but it is ultimately a mechanics question. And so we would sort of start by asking the question of, based on the current yield of the business that we're buying, assuming that that yield is like the margins are relatively stable, it's not a hypercyclical business, what is kind of the fundamental return we're getting?

50:51So hypothetically, that Kenyan retailer is trading at 10 times earnings, and we think that we can underwrite 10 % annual nominal growth. Theoretically, that's a 20%. return. But when Kenyan cost of equity is, we think, somewhere in the low to mid-20s, particularly for things that are kind of mid-sized or below, that's actually not really cheap. In fact, it's probably kind of expensive. So making sure you're getting a substantial spread over the local cost of equity is a very important part of our underwriting processes. And as a practical matter, unless we're really smoking that spread, it's not necessarily something that we're interested in engaging with.

51:36So in the case of, you know, take Brazil today, which has the highest real rates in the world outside of maybe Kazakhstan. And, you know, you, the Salik is in the low teens today. That's kind of their local risk free rate. There's a lot of companies there that are trading at very low multiples. But when your local risk free rate is in the teens and your equity risk premium, particularly particularly for smaller companies, should be mid to high single digits, you've got to be looking at a fundamental return of 20 % plus in notional terms, just to even get out of bed to think that it's even vaguely attractive.

52:09So a company in Brazil that we like is something that's connected to the ag industry. So it's mainly dollar denominated business streams pretty much all the way through. But on top of that, it's trading at a single digit multiple of earnings. And it's historically been able to grow at 20 to 40 percent nominal per year organically. And we think they continue to grow at a rate something like that over time. We may wind up getting this one totally wrong, but that combined return of the growth plus the earnings yield is so far in excess of the of the SELIC, the local risk free rate, that we think that's a really attractive place to have some of our Brazil exposure today.

52:50Whereas some other businesses in Brazil, particularly if real rates wind up coming down, are probably going to do fantastically well, but that winds up being much more macro call on rates. So your Kenyan retailer, I would just ask, to what extent is it materially beating the local spread? Because if you can find a U.S. company that you think is a fundamental return of 14 % to 17 % and its cost of equity is 10 % to 11%, that may be much better than a Kenyan company that's representing a 30 % nominal fundamental return because the actual real spread that you're getting might even be narrower versus what you're getting in the US.

53:28And so at a mechanical level, that's really how we try to differentiate these things. And obviously, as we go farther away from the stuff that we know best, we're going to demand an even higher spread to spend the time and really diligent stuff. Let me one last question that we can wrap up. But, you know, again, at the start, you said well-functioning US markets is a quote I have. And I believe you said, hey, 70 % of the world's market cap is kind of in the US. So when we're looking outside, it's a substantial minority, but still the majority is in the US well-function. Maybe it's a function of the recent markets, but I think David Einhorn would have argued for the past 14 years that your well-functioning equity markets are Fed-supportive, passive, liquidity, all this sort of stuff, right?

54:13And I'm not trying to hate. I'm just pulling up the jelly donut example that sits top of mind. I think a lot of people might push back on you on well-functioning markets. I mean, at the top, If you're S &P 50, very liquid, probably pretty efficient. I don't know. MAG 7 seems to do 20 % annualized every year, no matter what. But I think a lot of people would say, hey, as you start getting to the dregs of the Russell 2000 and especially below, I think they might say that there's a little bit of a UK problem where these things trade pretty inefficiently. The corporate governance gets much worse very quickly.

54:44You know I've torn my hair out at a lot of the corporate governance of these things. do you when you say well-functioning markets i mean you can say hey i just mean the top 500 names that's fine but do you think u.s markets as a whole are well-functioning so well-functioning is sort of a relative question to some extent so um for those people that really hate the way the u.s is functioning i'd urge them to start taking at least a little bit of a tour of some other markets around the world in the land of the blind the one-eyed man is king is kind of the situation there's a little bit of that but also just on top of that look the u.s is such a big market that there's always going to be pockets of cheapness.

55:18And we're always looking at things in the U S because it's too big to not be aware of what the reference point is for global cost of equity. Um, and we're, we, we find things that seem reasonably to very interesting even now. Uh, but on average valuations are much higher on average liquidity is much better. We think corporate governance is getting worse at the margin, but it's still, but it's still best in the world, or at least for now. My point is, is not that the U.S. is functioning perfectly and possibly because of passive and other things. There's a whole bunch of areas, particularly on the smaller side, where you're seeing these weird eccentricities where things hit air pockets and things like that.

56:01But I struggle to find a lot of situations in the U.S. that mirror the market mechanics dysfunctions that we see in a lot of other markets around the world. And by the way, if your listeners can show me some that are really attractive, I'd love to add to the list of companies I want to look at. I would love to be looking at nothing but U.S. companies. I'd be in a plane somewhat less than I am because we travel a lot every year to be close to the companies. But we find that it's much more episodic and sporadic because if nothing else, the market for corporate control in the U.S. is much more liquid and robust.

56:37And there's a huge private equity bid for anything that winds up getting cheap and staying cheap. And you have a well-established network of activists that are willing to come in and sometimes in a not so friendly way, try to fix things. So is the U S perfectly well-functioning? No. Are there things that seem like they're kind of breaking, um, in the smaller side of things and in the less loved parts of the market? I totally see that, but brokenness is relative. Actually last one. And then I'll let you go. You're the one who pointed this out to me, just reading some of your stuff. But, you know, I think one thing that it's interesting with the UK is these companies are cheap and a ton of them are getting taken out by private equity companies.

57:14Right. And, but it is one of those things where it's a win, win, win for everyone, except for perhaps shareholders. Those shareholders do get a big premium where, Hey, because of the way the UK underpays their CEOs and because of the way that they, no one owns any stock and because of the way that they focus on very way too conservative leverage levels. In my opinion, it actually creates a really nice private equity firms can come in, pay a huge premium to the market price, go in, increase leverage, give the CEO stocks, incentivize them, and they can create enormous amounts of value for themselves.

57:48And then you do get into this, like, I've always been of the opinion, if somebody wants to buy a stock from me for a big premium tomorrow, they can have it, I'll go find a new one. But you do create the, hey, if you sell, you know, if your company's trading for 10, and you sell it for 15, and three years later, private equity is retrading at 45, like, yeah, you made a little bit, but you left a lot of money on the table. Now you could find the next one, but then the next one gets taken out for 15. But you were the one who pointed that out to me. And I just think it's interesting how the limitations of a market, the cultural limitation, whatever it is, can create the opportunity for private equity to shift a lot of value to themselves while giving a little bit of value to shareholders.

58:22So I don't know if you've got any thoughts on anything I just said there. Yeah. I mean, the challenge for a lot of people in the UK is that the UK is now in year 10 of basically just continuous outflows from active management. And so anytime that they can ring the cash register and take a win, a large number of local active managers are very incentivized to do that. And I understand why they're coming from that perspective. My view is, is that sort of the happy medium is having shareholders like us that try to be aligned with management, try to be aligned with the board to the best of our ability and fight for fair value while having other folks that are pushing for more faster is sort of the happy medium in the ecosystem, maybe we're the deer and they're the wolves or something like that.

59:04I'd like to have something where I'm not being eaten. But but something where we're each, you know, performing a function in the broader ecosystem. And, you know, the reality is, is that every time you've watched the market, whether it be Japan or otherwise, go through one of these corporate governance revolutions, you know, the US saw it in the 70s into the 80s. If you remember the Danny DeVito movie, Other People's Money, you know, That's a classic example of sort of a conversation that he literally goes through an entire liquidation value calculation on a chalkboard in the boardroom. The early to mid stages of these kinds of renaissances in these markets are private equity or other people lobbing and opportunistic bids and making a lot of money for themselves.

59:49And if that signal value isn't there, that the water is warm, it's hard to wind up getting these competitive bid dynamics down the line where the markets actually start to converge unfair value. So I don't love it when my companies get bought for a lot less than they're worth. And there's been some markets where I've really torn my hair out over exactly that kind of outcome because I really felt like it got stolen from me. And I've actually gotten yelled at by some very large cap CFOs in the process of fighting those bids. But the reality is, is that that is probably a byproduct of these markets going from cheap and broken to hopefully going through some self-help processes and getting back to the point where they're serving some kind of price discovery function.

1:00:28Okay, actual last one, and then I'll let you go. You mentioned Japan, the corporate reforms they did over the past four to five years that have been in large part successful. They might be stalling out. I'm not sure. I can't say I'm a full expert. A lot of people have brought up South Korea and their attempted reforms there recently as Japan 2.0. And this is – obviously, South Korea has the memory stocks, which are a whole different ballgame. But I do think it's interesting. I saw just before we started recording South Korea, their index has been hammered by memory stocks recently. I saw their president being like, if you've lost money, take a deep breath.

1:01:02Here's suicide prevention hotlines. You're like, whoa, I didn't realize it hit that. But do you think the South Korea market right now, is that Japan 2.0 or are you seeing something different? I'd just love just quick thoughts on that if you've got them. We think it's a super attractive market. It's something – it's a market that we've now spent a fair bit of time on for several years. You really can see the reforms stacking up and the valuations are really compelling. the challenges are that there's more work to go in terms of modernizing and making more minority friendly the various governance and other codes.

1:01:37And a lot of progress has already been made, by the way. But these are often family-controlled businesses, which is a fairly different dynamic than, say, Japan, for example. And where there's definitely family-controlled businesses, but it's a smaller portion of the overall companies. And you also have fewer of these sort of complicated holdco structures. So, and so that sort of contributes to a cultural environment where even as the rules change, you may have a lot of the key decision makers be slow to fully getting with the program in terms of that. But with all that being said, we think it's worth spending time on.

1:02:13We've owned stuff there for a number of years now. We expect to continue to play there for a lengthy period of time. It's absolutely competing for capital with us versus, to say the UK, where those companies tend to be more international, kind of the corporate governance is already there. They tend to be somewhat larger on average. Valuations are very good, but you can find some even cheaper stuff in the UK. It just has slightly different characteristics in terms of exactly where the cultural stuff is, exactly where the corporate governance stuff is. And they tend to be smaller, more domestic, things like that, which is not a bad thing, but it does change the nature of the bet.

1:02:48But we see those in a handful of other markets as being sort of the most exciting corporate governance related markets in the world. No, you hit it spot on because I think what's interesting in Japan, they introduced the reforms. And Japan is very much, you know, it was a corporate managerial class that had gotten in control of these very low ownership. There was obviously employment for life, retaining tons of cash on the balance sheet. So that's one reform. South Korea has got some of that. But South Korea, it is family control, dynastic legacies. So as you're introducing these, I mean, they do own a lot of stock in many cases.

1:03:20So yes, the reforms are targeting the same thing, but you're coming at it from kind of two different angles. So I haven't spent as much time as there, but that's just like the high level thoughts I had. So it's interesting to get you. Ben Isaac, Brizzo Capital, one of my favorite people in the world to talk stocks with. Thank you so much for coming on. And we will chat soon, buddy. Maybe in next game this year. Yeah, I'm looking forward to it, man. Thanks for taking the time. Love the podcast. Have a great day. A quick disclaimer. Nothing on this podcast should be considered investment advice.

1:03:47Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks. Mr. Monopoly here. Miss me? Monopoly is back at McDonald's with millions of prizes. A 2027 cheap charity. A Carnival Cruise vacation. Gift cards from DoorDash and Best Buy. He'll then play in the McDonald's app. Get your bag. No purchase necessary. 50 U.S. and D.C. age 18 plus. See play at mcd.com for rules and play at mcd.com slash A-M-O-E for info and playing without purchase by mail by November 2nd. Chance card game ends November 8th. Game ends November 22nd, 2026.

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