Josh Resnick is the founder and managing partner of Jericho Capital, a hedge fund focused on investing primarily in the global technology, media and telecommunications sectors. Josh founded Jericho Capital in 2009 with $36 million in assets under management and has grown the fund to $2 billion. Before founding Jericho Capital, Josh was a key principal at TCS Capital during which time he helped grow the fund from $5 million to over $3 billion. Previously, Josh was a Managing Director at KPE Ventures, a media, entertainment and technology venture capital fund, and prior to that an analyst at Fox Entertainment Group in Los Angeles. Josh began his career as an analyst in the media and entertainment investment banking group at Bear Stearns. Josh graduated summa cum laude with a B.A. in Economics from Emory University. Josh serves on the Board of Directors of the Child Mind Institute in New York City.
Graham & Doddsville (G&D): Can you tell us about your background and path to investing?
Josh Resnick (JR): I grew up in Jericho, New York, which is where I came up with our fund name. My father was a dentist, but he followed the stock market, and we always used to talk about stocks. Through those conversations, I became interested in Wall Street and investing.
After my freshman year at Emory University, I spent the summer interning at Republic National Bank. I was so inspired by the pace and the intelligence of people who worked on Wall Street, I knew that was what I wanted to do. During my junior year, I focused all my energy on building a background that would be attractive for investment banking.
The following summer, I worked at Bear Stearns and joined their Investment Banking Analyst Program after graduation. The first project I was staffed on was Time Warner’s acquisition of Turner Broadcasting Systems. This was happening at the same time that Netscape was going public, and we were also involved in selling a company to AOL. You could just see that the media and telecom and technology industries were going to be very dynamic places over the course of my lifetime.
At the end of my analyst program, I had an opportunity to join Fox in Los Angeles, which was one of our clients. During my time at Fox, I was spending every minute of my free time looking at stocks. I had a lot of fun thinking through industry dynamics and taking positions based on my research.
I eventually left Fox for a brief stint to help my friend’s brother launch a venture capital fund. The subsequent internet meltdown convinced me that I didn’t want to invest in the private markets. I wanted the flexibility of exiting positions if I changed my mind on an investment.
In 2001, I decided to join Eric Semler shortly after he launched TCS Management, a long/short hedge fund focused on the TMT sectors. Eric and I had a number of mutual friends and former colleagues, and we really hit it off. When I joined, it was the two of us and our CFO sitting in one office. I was involved in the investment decisions, but Eric was the sole portfolio manager. We did well in 2001, held up in a tough market in 2002, and had a great year in 2003. We developed a reputation for generating independent and interesting ideas and were able to grow the fund nicely thereafter.
As 2009 rolled around, I decided to launch my own fund. My thinking was that the best time to start a hedge fund is when nobody wants to start a hedge fund. That was the situation in 2001 and I saw a very similar landscape in 2009.
We started out in July of that year. We really could not raise any institutional money, but it was a fantastic time to be involved in the market. There were a number of very compelling investment opportunities and we had an excellent year. We have been able to perform in years following 2009 as well.
G&D: You focus on industries where things can change quickly, and that challenge is compounded as you often look at international businesses where you are not necessarily on the ground next to the management team. How did that approach evolve?
JR: Upon joining Fox in 1997, I had the privilege of working for Rupert Murdoch. He viewed everything as a global opportunity. Fox probably generated around 60% of revenue and earnings from international markets. This was at a time when most media companies were very US-centric. Many of them continue to be very US-centric. Every time he would see something work in one market, he would try to capitalize on that opportunity in other parts of the world. Satellite television is one obvious example. He launched Sky in the UK and in Latin America. He also worked on satellite in the US before ultimately deciding that the US market was a different market structure because of the presence of cable.
Another example is the National Geographic Channel. We recognized that the competitive landscape in the US was very difficult due to the presence of Discovery Communications, but in international markets, National Geographic had an open-ended opportunity. We had satellite distribution in markets around the world and could immediately put National Geographic in all of these homes and create a tremendous amount of value.
I adopted that way of thinking. For example, when we started our fund, we had 15% of our capital in Australia. I know from my time at Fox that Australia is normally an expensive media market. When we were launching in 2009, a number of investors were talking about Australia as the next housing bubble to burst. All these funds were short everything in Australia. I flew to Australia and met the media companies. Business was going great and executives didn’t see any weakness at all. We made a big bet that we thought was asymmetric and it worked out well for us. Also, one of our best performing stocks this year has been VimpelCom (VIP). People call us crazy for owning a Russian telecom, but when people take a broad brush approach to a market that has nothing to do with the company’s fundamentals, that creates opportunity. More than half of VIP’s operations are outside of Russia and the Ukraine, but the stock traded with near perfect correlation to the Russian index last year, which created an opportunity for us.
G&D: You mentioned the lesson of a global and opportunistic approach from your time at Fox. Were there any other lessons from your time at an operating business?
JR: Definitely. I would say probably the single most important variable for us when we’re looking at companies is assessing management, and an operational background certainly helps for that. One of the best investments I had in my career was Pixar. We first started buying Pixar in 2002 when the whole world was short the stock. Everyone talked about how they only released one movie every two years, and the multiple was too high. At the time, all the IP was owned by Disney, and the bears thought that Disney would pull the plug on Pixar if they made a bad movie, wiping out the stock. That was the general consensus. But Pixar just kept putting out amazing movies one after another.
We spent a lot of time with the management team at Pixar’s headquarters, and we realized these people were very smart and disciplined, and that they had an excellent process for making movies. We made a big bet on the company. The bears just didn’t appreciate how important the DNA of that company was, and how that DNA was going to create so much value. In the media world, there are not that many examples of companies creating new and valuable intellectual property over the last 20 years, but the Pixar team was among the few that could consistently accomplish this feat.
I firmly believe the management and culture of companies are underappreciated. I’m willing to pay premium multiples to own great businesses managed by great management teams. These are the investments that outperform and generate higher returns on capital. I’m rarely drawn to the cheaper companies on a relative basis.
When I worked at Fox, I noticed that it was very difficult to motivate tens of thousands of employees. It is a very challenging task, and companies that can implement the processes and the procedures to motivate people, to align their goals with creating value for the business, these are the companies that will reward their shareholders over time.
G&D: Do you have to meet with management before making an investment, particularly if a business is based outside the US?
JR: Typically, meeting management is required before we make a meaningful decision. There are some exceptions. We have a position in Amazon (AMZN) right now. I’m very unlikely to get access to Jeff Bezos; he does one investor meeting a year. In situations where you aren’t able to meet management, you have to just to figure out what the variables are and what makes you think it’s a great stock.
You never get to travel as much as you want. If it was up to me, I’d be out of the office 300 days a year. I’d just go and visit companies all around the world. It’s not practical to do that from a personal or professional standpoint, but I try to get out and talk to people.
In the previous example, visiting Australia was important to finalizing the thesis. If you don’t travel, you don’t get that crystallization of the idea in your head. Company visits also give insight into the personalities of the employees and other underappreciated elements that can help you. When you’re looking at it from your computer in New York, you see it in a different way than when you are meeting the company in their offices.
G&D: Staying on the topic of your AMZN position, how do you gain conviction on valuation, considering their lack of profitability is always such a vigorous debate?
JR: We have watched AMZN for a long time. Jeff Bezos has been very focused on the long term, and has continued investing in the business at the expense of margin improvement. He also hasn’t offered Wall Street much in the way of transparency. Last year, with the negative sentiment toward internet companies, AMZN declined around 25%. We think that precipitated a change in AMZN’s behavior. One thing that people may not appreciate with AMZN is that the highest paid employee there draws $165k in cash salary; most compensation is stock-based. Employees at Amazon are told to expect that the stock will return 15% per year on average and to use that estimate to determine total compensation. As we approached the end of last year with the stock struggling, we spoke to a handful of employees at Amazon who said, “I love working at Amazon, but I’m not paying to work at a company.” So we realized that AMZN would need to change to retain these incredible employees. When they reported 4Q results in February, not only did they exceed earnings estimates by 100%, but they also disclosed that they were going to be releasing separate financials for their Amazon Web Services (“AWS”) business in the next earnings report.
The alarm went off for us. It became clear that AMZN does care about the share price. And if they actually do care about the share price, it will increase significantly.
Improved transparency will also showcase that AMZN’s retail business is actually quite profitable. A lot of investors I speak to think Amazon’s retail business is break-even to loss-making. But AMZN now sells nearly 45% of units via its 3rd party marketplace, which we think is extremely high margin. Also, our research suggests that AWS runs at negative 10–20% EBIT margins, which implies much higher EBIT margins than people realize.
Basically, we see the market moving to value in AMZN in three components: First, core retail business in the US; second, AWS; and third, the international ecommerce business.
With AWS, we think it could be spun off as a separate public entity. As the leader in the cloud, it could fetch a revenue multiple given the growth rate and the potential future margin structure. With US ecommerce, we have an idea of long term margin potential and apply a multiple to that. On International ecommerce, we estimate that it may lose roughly $1 billion in China. We have heard through our relationships that AMZN is changing how it views the China opportunity. We are amazed that there is still not a single example of a US internet company building a successful business on its own in China. We don’t think Amazon is going to be the first. Based on our conversations, we think AMZN is likely to fold its China operations into JD.com in exchange for an equity stake, which should meaningfully improve the margin profile of the international business.
G&D: Would you like AMZN to do that in India as well with Flipkart?
JR: No, I think it’s possible to build a business in India. It’s challenging, but it’s not like China. India is more of a free market for international competition and there is Western-based rule of law. I don’t know if they will be successful in India, but it’s a much higher probability of success than in China where we think their probabilities are less than 5%.
G&D: And the video business?
JR: Our approach essentially gives negative value for the video business, which we think is quite conservative. We estimate they are losing between $1.5-$2 billion from content spending this year, and we don’t add these costs back in our valuation. There is essentially no video revenue. Some of the value of the video business does get captured in the retail business because video helps drive Prime subscriptions to some degree.
G&D: Speaking of content, do you have a view on CBS?
JR: The multiple gap has narrowed considerably compared to peer media companies over the last few years. It’s been a phenomenal performing stock and I think that really speaks to the strength of the management team led by Leslie Moonves.
With CBS, we think the whole business revolves around the television ecosystem staying intact, and I have some concerns. If you simply look at last year’s expectations and today’s reality for the US TV ad market, you would definitely see some underperformance. Digital media seems to be capturing some of the TV ad spend. There was a 200 basis point movement from television into digital media. I don’t see any counteracting forces that would stop that trend. When you look at the consumption patterns of the demographics that really matter for advertisers, they’re all watching YouTube and Netflix. They’re consuming video in very different ways compared to the average 54-year-old CBS viewer.
CBS still provides a tremendous amount of value to the ecosystem. If you compare share of affiliate fee revenue to share of ratings, you see CBS is valuable to distributors. That gap will continue to narrow, which will be great for CBS. We’re not involved. If the stock really got hammered, we would be very interested in it, but right now the valuation seems well-balanced relative to the risks.
G&D: In the past, you have talked about how we will eventually see differentiation between the real strategic assets and the more marginal content in the US media landscape. What do you think are the great strategic assets for US media?
JR: That’s a good question. I don’t really know that we have a great play in US media right now. I think the greatest strategic asset in US media is Instagram, which we own through Facebook (FB). The valuation of Instagram could be really incredible if FB had not purchased them. When they start to advertise on Instagram, it’s going to be a massively valuable company.
G&D: Speaking of these technology companies, some valuations are off the charts. How do you think about valuing these technology companies?
JR: It depends. To me, FB is not an expensive stock. Next year, we have FB earning above $3 and the stock today is at $79. They have assets like Instagram and WhatsApp, both of which have not been monetized in a significant way, so they’re not captured in the multiple. They have yet to press the accelerator on video ads, which could be a huge, multiple-billion dollar opportunity for them.
FB is in a similar situation to what I referenced earlier: we are looking for situations where people are painting with a broad brush. There clearly are some stocks, especially in the private market, which are trading at aggressive valuations. We think FB is a massive share taker in the media world, and we think that is going to continue for a while.
G&D: There has been some discussion that WhatsApp is making a strategic error by not trying to build a more robust mobile ecosystem and mobile platform, and they are ceding the opportunity to Snapchat and others. Do you have a view?
JR: Maybe. I think they’re both in very different situations. WhatsApp, as a subsidiary of FB, has the luxury of not feeling monetization pressure. The user growth of WhatsApp is astonishing, so I don’t know how you can criticize that. FB seems to be focused on building engagement first and focusing on monetization after.
Some of these companies have built such loyal user bases that ads can easily be incorporated. Another example is Tencent (700.HK), one of our largest positions in the fund. We believe Tencent is a very exciting and interesting stock, and on our numbers for next year, we believe Tencent will be trading in the teens. That’s with accelerating revenue growth, and much of that revenue will be coming from advertising, which is a higher-margin revenue stream compared to mobile gaming. We estimate the monetization potential on Tencent’s platform for next year could be RMB 7 billion, while Wall Street currently expects around RMB 4 billion.
G&D: How do you generate your ideas?
JR: We are always looking for interesting companies, and when we find them, we track them over time. Sometimes our knowledge and perspective allows us to spot great opportunities. One example is our biggest winner last year, MercadoLibre (MELI). It has historically been known as the eBay of Latin America. I actually met their team while I was in the VC industry. The founder of MELI, Marcos Galperin, went to Penn undergrad, worked as an investment banker in the TMT group at JPMorgan, and later attended Stanford Business School where he came up with the idea for the company.
He saw how successful eBay was in the US and he basically said, “I can create that business in Latin America,” and so they raised venture capital money. It was probably a $20 million valuation when we passed on it in my prior job. I watched that company over time dominate ecommerce in Latin America despite a very complex ecommerce landscape.
The fixed broadband network penetration is low and the quality is terrible, wireless smart phone penetration is very low, there are entrenched retailers that have the ability to spend tons of money, and consumers are oriented toward making purchases via installment plans.
These guys have just persevered, and they have built a phenomenal business. From what I can tell, they’re the only company in Latin America that actually makes money in ecommerce.
The question has always been, when do you initiate a position given valuation is usually challenging? Last summer, we ended up getting a great opportunity to enter. Around 23% of its revenue came from Venezuela and the exchange rate in the black market was diverging significantly from the official rate. According to the accounting principles, it had to record the revenues and the profits based on the stated market rate, not the black market rate.
As a result, the Street developed a short case of how MELI’s earnings are going to take a massive hit when they have to move to the new translation rate for the Venezuelan bolivar. Secondly, another one of its large markets is Argentina, where there is also a gap between the stated market rate and black market rate for pesos.
The stock’s short interest built, and the stock price performance was fairly weak. The share price got to the mid $80’s. Then the company ripped off the Band-Aid. It went from translating the bolivar at 8 to 1, to 50 to 1. These currency translation adjustments had a massive optical impact on earnings. The stock went down, and that was when we started buying.
G&D: How did you think about valuation for MELI?
JR: We weren’t valuing the company on trailing earnings. To me, the enterprise value is $4 billion. How does that compare to the opportunity? There is a huge addressable market for this company over many years. They have a population of 520 million people to address in regions where ecommerce penetration today is under 2%. And I think that they are the winners. I have visited them multiple times in Buenos Aires. The management team is best in class, and they have done a fantastic job of building a great durable culture. Employee turnover is very low and everyone seems smart and social. Most of the team is US-educated.
There are real barriers to entry from international players. If eBay wants to build a business in LATAM, it will have to get its employees to move down to Sao Paulo or Rio. To that we say: good luck. They’re not relocating their families down there and if they’re doing it, you have to pay them some godly amount of money per year.
We built the position while every Wall Street analyst discussed how expensive it was. The stock went from as low as $82 to $130 today, trampling the bears in the process. We have reduced our position somewhat as the share price continued to increase.
G&D: From what we understand, your EPS expectations for MELI were 7% above consensus on a forward basis. We wouldn’t characterize that as a massively variant view. Do you attribute your edge to the ability to think about the long-term opportunity and your willingness to look out farther than some other analysts?
JR: Yes, that’s part of it. It’s also our understanding of the strategic value of the company. We think MELI is slightly misperceived as a structural loser because of its association as the eBay of Latin America. We actually think it is more similar to Alibaba’s business model considering it’s a fixed price marketplace without any auction format. And MELI was launching a business similar to T-Mall. They were onboarding big brands to sell on their platform. That aspect of their business had grown dramatically over the first six months of last year and we were excited about that. I thought the association would change upon Alibaba’s IPO.
G&D: Do they face any first-party competition, from more of an Amazon-type model?
JR: Yes, the largest first party competitor is B2W, which is a division of a very large retailer in Brazil. They have had some impact, but MELI has done a good job innovating to stay ahead. MELI has built its own shipping network, MercadoEnvios, so you aren’t receiving product from sellers just shipping everything on their own.
Also, in some cases, we are very comfortable owning a position without a differentiated view on near term EPS expectations. Our differentiated view might simply come from a willingness to apply a different multiple. This was certainly the case in our positions in Moody’s and McGraw-Hill a few years ago.
It was very well known by the market that the Department of Justice and Congress had been evaluating the credit rating agencies and assessing a potential fine for them as a result of their ratings on CDOs issued during that 2004 to 2007 time period. Eric Holder openly discussed what bad actors they had been during this time period. McGraw Hill was fined $5 billion, and both stocks were down about 45% in the next week.
Some very prominent hedge fund managers were on CNBC discussing how the credit rating agencies were going to have their equity values wiped out and the companies would be put into receivership. A number of investors were using words we like to hear: “open-ended legal risk”, “wiped out”, “unknowable”. We looked at the business and thought they would earn $4 a share, which implied very low valuations at the time. That can work for us.
G&D: You just talked about selling. What caused you to trim MELI?
JR: The stock has had a pretty big move which reduces the asymmetry of risk/reward. Venezuela also likely needs another round of currency revaluation, so we have to assess what exactly is priced in. And then this past quarter, they had a blow-out on the top line, but they lost ten points of margin on the bottom line due to investments in marketing and logistics. That took our earnings expectations down for the year, reducing our differentiation versus consensus.
In general, we like investment opportunities where earnings are going to increase or outperform consensus expectations by 25% or 30%, and we can assume a constant or lower multiple. We don’t like relying on multiple expansion as much, but it can work for us.
G&D: Given your TMT focus, have you been active at all in the late stage, pre-IPO market?
JR: We haven’t invested in those types of companies. From my experience in venture investing, you spend an incredible amount of time on one single investment opportunity. As a manager of a public market portfolio of equities, it would be very challenging to spend the appropriate amount of time and attention on the private market investments. Also, having the appropriate fund structure right is very important. There are funds that have private investment arms entirely separate from the public team. I think that is the right approach.
One challenge for public funds is the illiquidity of the investments. In 2008, we saw the challenges illiquid side-pockets can pose for investors in the public markets. That’s another consideration.
G&D: It appears a number of your best ideas were contrarian to some degree. How do you go about building conviction in your ideas?
JR: In many cases, it’s the cumulative experience with those companies over a long period of time, as we mentioned earlier. In other rare cases, we get conviction from doing more research and analysis than other investors. That can definitely be a source of conviction and comfort on the short side. That might have been the case in our largest overall winner in 2012 with Groupon (GRPN). We made 450 basis points of fund attribution on the GRPN short and our success was helped by the amount of work we had done on the company before it listed publicly.
Our research helped us clearly see that the story management was spinning to Wall Street was wildly different from reality. Upon going public, GRPN gave 12-month forward guidance of $1 billion in EBITDA. 70% of that was coming from international markets, and based on our research, we thought the international operations were in real trouble. Our estimate for the whole company using generous assumptions was for $350 million in EBITDA. It ended up being $300 million.
We’re always trying to find situations where we know things that the market does not. That is the greatest challenge in this business.
G&D: To what would you attribute your success in being able to do that?
JR: I think that the biggest driver for me is humility. By that, I mean that I constantly question my thinking on a stock. I am not wed to any particular view. I am not going to be arrogant and say that I’m right and the market is wrong without constantly reassessing what the market is concerned about.
Of course, sometimes we are very wrong. We were short BlackBerry (BBRY) in 2013. John Chen had joined as CEO, and if you look at his background, you can tell this is not a guy you want to short. He was on the board of Wells Fargo, Disney, and Cal Tech. He had executed multiple successful turnarounds. However, it was pretty clear that there was a ton of imagination in between the current state of affairs and what they talked about as their goals. We had conviction that they would miss the quarter and the long term expectations for the stock would be reset.
Part of that thesis came to fruition, after they reported earnings in December. The stock opened down 10%, but then amazingly finished the day up 22%.
I thought about it all weekend. We were right, but we lost a lot of money. When I looked at the calendar, I realized BBRY was going to be able to present at CES and meet a ton of investors. John Chen would definitely impress everyone and convince them the turnaround strategy was winnable. We know from past turnarounds that managers typically get a 6 or 12-month honeymoon period. Investors will just ignore the numbers and give the CEO credit for whatever turnaround plan he plans to implement. I got in on Monday, covered the whole short and we actually went long. It was one of our largest winners last year. We always thought it would be very challenging to deliver the results over the long term that BBRY presented, but we just felt like it was going to be this period of time where investors are going to focus on the story and Chen’s background.
G&D: Are there any additional favorite ideas that you would be willing to discuss?
JR: One of our favorite stocks is Telecom Italia (TI). It is tied to two different themes we have been working on, which is the consolidation of the European and Brazilian telecom industries. Interestingly, because of Telecom Italia’s 67% ownership of the Brazilian subsidiary TIM Participações, we actually think Telecom Italia is one of the better ways to play Brazilian consolidation.
Historically, Europe telecoms have been viewed as a public good. These companies have continually been required to buy spectrum from the government and pay higher taxes on certain revenue items. The response from the operators has been to avoid investment in their networks. But now we are at a point where you need to go to a café to access a Wi-Fi network, and the speeds will be really slow. The network quality dramatically lags the networks in other regions.
German Chancellor Angela Merkel gave a speech last summer where she noted that there are 1.3 billion people in China with three telecom operators, 300 million people in the United States with four telecom operators, and 350 million in Europe with 28 telecom operators. Slowly but surely, we will see market consolidation. In Austria, Ireland, and Germany, the market has already shrunk from four players to three.
A recent development was the CEO of Orange mentioning in the Wall Street Journal that he was open to acquiring Telecom Italia. That raises the possibility of cross border consolidation. That’s really exciting for Telecom Italia, especially since everything we have learned about the company suggests the Italian government is not wed to having Telecom Italia as an independent operator.
Telecom Italia company could generate M&A interest from Deutsche Telekom, Orange, or Telefónica. This is a hugely strategic asset yet it trades at a big discount to where other operators in Europe trade. One of the reasons it trades at a discount has been the leverage, and concerns around its ability to access the capital markets. Last month, the company borrowed at 3.3% so I don’t think that is a legitimate concern.
There is also the potential for mobile consolidation in Italy. The #3 and #4 operators (Hutchinson and WIND) are in discussions. Mobile ARPUs have fallen by so much that in order to return to the average ARPU of the other European markets, ARPU would have to increase 40% from here. All of which would be high margin revenue.
In the fixed line business, Italy is one of the only markets in Europe that doesn’t have cable. Additionally, a government initiative to spur economic growth is providing financial assistance for fiber deployment around the country which Telecom Italia will own. So you can imagine them owning the whole enterprise market and most of the residential market in Italy.
Finally, we think its 67% stake in TIM Participações in Brazil will be very valuable upon consolidation. We think consolidation is inevitable, but it has been delayed by Oi’s financial situation. When Brazil goes from four players to three, it will be a bonanza because it’s a 200 million person country with low smart phone penetration, low data related revenue, and a population of people who love to talk and access the internet.
Telecom Italia’s stock today is €1.08. We think it’s worth at least €1.50, and with certain consolidation scenarios, it could be worth €1.80 or more.
G&D: One of the most aggressive consolidators in Europe has been Patrick Drahi. He seems to fit a number of the characteristics of what you’d like to see in managers. Have you spent time on Numericable or Altice?
JR: I think that’s the biggest regret I have with our European investments over the last year. We should have owned Altice or Numericable. In our meetings with their team, we were very impressed. Sometimes you’ve just got to go with your gut about these people. Their recent deal to buyback Vivendi’s Numericable stake for 19% below the current market price is incredible. It’s a great illustration that if you back a great CEO and management team, you’ll constantly be positively surprised by the smart things that they do. When you back the bad management teams, you’re constantly negatively surprised by the stupid things that they do.
G&D: Many of our readers are students interested in becoming professional investors. Can you share any advice on how to enter the field, and to remain successful over the long term?
JR: The best way to enter the field is to meet with as many people as possible and hone in on specific ideas that you have, along with supporting materials. You really want to demonstrate that you are extremely committed to a career in investment management and have been risking your personal capital for years. In my opinion, the most successful investors are the individuals who really love what they do. You need to be thinking constantly about where you might be wrong with your thesis and how you can verify that you aren’t missing anything. The market is very smart and you have to respect it and continually reconfirm what you know about a situation that the market doesn’t appreciate.
G&D: Thank you for your time, Josh.