Stansberry Research

Doc Eifrig's COVID-19 Briefing No. 12

June 18, 2020

Editor's note: You can find a full transcript of Doc and Matt's briefing, complete with slides, below the video. If you'd like to view a pdf of the slides, click here.

Dr. David Eifrig: Hello everybody and welcome to COVID conversation No. 12. We got a dozen of these now with this one. Welcome, Matt. How are things? How's your week?

Matt Weinschenk: Good, good. Another week. We have some issues coming out this week so people should be excited… And Income Intelligence, if you're a subscriber. But busy.

Doc: Fantastic. And as always you have questions, send them to us at And then we'd love to have you share this or sign up at where we write daily about health and wealth issues and share that stuff.

And let's dive right into it.

Matt: Yeah, it's a busy week, a lot to talk about. We'll change our order a little bit here. The big

media story, at least of the week is second wave, right?

There's new cases, cases rising at least in certain areas. We're going to try and dig into that as much as we can.

You know, also just to point out I think it's you know, people argue about second wave all it's still the first wave. Let's not get caught up into semantics of the term second wave.

But there are certainly cases where the number… There are certainly places I should say where the number of cases are on the rise. Looking state by state you know, California we see steady growth. Texas and Florida are the real kind of two problems states that have had a real boom here. But you know, North Carolina, Arizona, a lot of these guys very sharp inclines. Inflection points that you know, I think we're going to have quite a quite a call today, but so I'll give my opinion in some cases here. I see inflection points. You know, last two weeks things are open. But a lot of places you know, New York has done. New Jersey's done. I'm here in Maryland, we've got a super steep drop. So that's great, for me, sorry everybody else.

So there's good signs, but there's definitely problem areas.

You can go right down to I don't know if this is county or zip code. Now that I look at it looks like county. You can go right down to a more granular level. And even if you say Texas is a problem, you know, not all the Texas, you know, not all Florida. So, viruses are local, they spread locally. So let's figure out what we can see about these problem areas. And if we're having a second wave.

This shows a number of case current cases as a total percentage, since reopen, right? So I think, you know, let me give me give my narrative of what's happened here… And that's we had these we had these breakouts in Washington and New York and New Jersey, we had all these problem areas, and we shut down everywhere. And you know, a lot of places didn't really have many cases at all at that point, but we kind of had this huge shutdown even though it was state-by-state decision. Now we're reopening and New York has done but other places never even had their outbreak. And now, you know, Arizona you can see 84%. Somewhere around 84% of cases now. I'm sorry. 84% of all their cases have happened since reopen not before reopened. Same thing, Minnesota.

So it's really just geographically, it's just not the same everywhere. It's a very different story everwhere and very different experience.

Doc: Yeah, fair enough. And I think what folks will find and maybe what folks don't know is before this, we go through the slides a little bit and try to talk at our feel. And Matt and I today had the most energetic discussion, disagreement perhaps or angle from this, but that's the fun of this.

What I interpret this to be is the natural herd immunity process that happens. Everyone shut down in these lesser populated areas and did it enough so that this thing didn't really spread at all. Whereas the places that our blue –  Washington in the upper left New York in the right – big, huge city in New York City, I mean, you could have shut it down, but you still got people running around. It's not like Beijing, where they can force you to lock the areas, block streets. People were still. And now there's enough old cases, if you will, that it's hard to have cases pop up when they've already happened.

And so I see this as a natural process and I'm less worried about it than you might be, Matt. I don't know. But I think it's a great chart that shows you and that's your point. Now that we've reopened, we are seeing these increases in cases.

Matt: The good news is so again overall, and we've pointed this out before kind of New York drove this and New York is kind of driving this as well.

But you know, we did go from here, right? We went from downtrend to now we're definitely seemingly staying flat at 20,000. And we don't want to stay flat. We want to we want to push this thing down, you know, this is an R of 1 essentially. And, you know, just a little tilt to an R of 1.1 turns into a fast spread with exponential growth.

And I'll also point out I don't know why this this website, we're using this chart. We used to do three-day average and they switch to seven. They don't seem to have the three-day available anymore. It's essentially the same story a little smoother. But I did want to point that out because it does look different.

And one of the… so if you're worried, is the second wave a real thing? Are we supposed to be scared? You know, one counter to that is that it's a testing artifact. Maybe we should start out right now and say, Doc and I don't really agree on this one. But let's look at it… Is testing driving the growing cases, especially in these hotspot areas? Yeah, we'll hear from you, Doc.

Doc: Yeah. So when I labeled the slide testing pandemic, it's probably not the correct – after talking with you earlier – the correct description of this. But what I want to point out is we, we didn't have the tests available in early March, and people who were being tested and those tests being used on them, you can see it got up to 23% of the tests were positive. That's that blue line, right?

And what's happened is, we've increased testing, that's these light orange lines. And as we've increased the testing, to test anyone and everyone that's moving. People can go in and get tested. I know some physicians that are getting tested every week because they're, they also have their spices organized by alphabet in their club cupboards and drawers. And they're just worried about this disease, even though they're 45 years old and aren't gonna get bothered. Anyone and everyone to get tested now. And the positive test rate has plummeted. And that's an artifact of so many more testing that we're not testing people that we think have a high probability of being positive. And Matt and I can go back and forth and out if people want to, I don't think they do.

I'm excited about this chart. And to me, the idea is that we're testing a lot a lot of people. You would argue, and I'll put words in your mouth maybe, that that's a good thing. Because then that will allow us to find out who's sick and then tell them to stay home. And I agree with you when you

say it that way. Is that a fair?

Matt: Yeah, yeah, I mean, so. So let's – we'll talk we'll give each other's viewpoints. So I'll give your point. So before all this, you know, you were skeptical of over testing for all sorts of conditions because we get false positives. Someone has no symptoms, you test them. And now they have this thing they have to worry about. So there's no need to go in. A lot of tests are invasive, they're costly. Well, so you really only want to test people for a reason. And that's normally the case.

And I agree with you on that. And I'm skeptical. My doctor says you need this test. I say I'm going to ask my other doctor first, which is you. So but in this case, right, we want to find people who are pre-symptomatic, who don't know they have it and we want to stop them from spreading it to other people. So in this case, we want to be testing a lot so the doctor with his spice cabinet organized, if he has it and doesn't know it yet. He can't. I don't want him seeing patients. So he should be getting it every week. And when he when he finally finds out, he gets it, he needs to go on vacation. Right?

Doc: Yeah. And here's this is the point where we're gonna have to agree to disagree.

Matt: Sure.

Doc: And you had said something earlier, we don't again, we don't think of the dive this much deeper. And you can certainly comment to my comment. It's this notion that pre-symptomatic people or asymptomatic people spread virus, and I've spent a fair amount of time this week researching that. You may have as well. Asymptomatic people that WHO came out and said asymptomatic people don't spread virus. And I agree with them completely. We actually got flagged by Facebook on our Health & Wealth page, because we cited that article that was cited by CNN and we posted it. And some people go, "Oh, that's not true." It's absolutely true.

99.9% of people who are asymptomatic, don't shed viruses. End of story. Pre-symptomatic is kind of a fluffy way of saying they don't have any symptoms and they don't have any signs. You don't look and see them dripping nose or sneezing, they don't have a cold. But they're going to get a cold and they're early in that stage.

It would be the strangest thing in the world for people to tell me that pre-symptomatic people –

and again, they're before they're symptomatic. They're going to get the disease shed virus in that pre-symptomatic phase. They're going to shut it there when they're symptomatic. And maybe a day before they're symptomatic. But that the science on that is terrible in a sense of just it's never been true with viruses that I know. And I double check this stuff this past week.

And that drove me crazy because again, we got tagged on our Facebook thing that we were you know

Like we were citing somebody else's article that it was true or not true. So that's my, that's my counter to the using the word pre-symptomatic. But yeah.

Matt: So the question is, so there's a question of should we be testing and should we not be testing? And there's, we can debate that. Then there's the question of is testing driving these hotspot growth numbers?

And, you know, I would you know, so testing recently is mostly flat. Okay.

Doc: Which I'm happier about. Yep. Right. And you can see this is the chart you're showing, you know, I say, except in New York, because New York has been testing and testing and testing. Because they're trying to and you want to you want to open up New York City, and I'm okay with it. But I just want people to point out that, like, okay, when you're going to open up, like, come on people, because later we're going to show slides again, that show you that this is a seasonal virus. It's time It's time. So that's my guess.

Matt: Okay, so again, let's diagnose these hotspots again.

If testing were driving the hotspot, you wouldn't see hospitalizations rising in Texas. That is definitely the case. Not a good sign. All right.

Doc: And you know, when did Texas open up, do you know offhand?

Matt: I wanna say May 1. Okay, that was when almost everybody did. They might have been a week off, but that it was around there. Yeah.

Doc: All right. Fair enough.

Matt: Now, so the other hotspot is Florida. And again, we're looking at testing a number of positives. It's kind of a similar the other chart in a different format.

Doc: Yeah, and these are weekly, and it's just showing you that – and we'll get to that in a second on the next slide – but this just shows you that they're doing a whole lot of testing and the positivity is still not that great. But again, we'll another time on my testing issues.

But the good news is or the bad news is it's from two counties mainly Miami Dade and Palm Beach where the positive test rate is high. But to me that's a good thing that you're catching it where the rates are high. And then down below and I think Broward is in there on the next slide it shows or maybe a slide later by county.

Yep, there you go.

Matt: Broward has the most tests, but their rate is pretty low.


Doc: And then this this this confirms that, right, that you got all these new cases but death since May 1 have declining so that's a good thing. So I'm okay with lots of cases and less death.

Matt: Exactly. That could be the case. So let's look again is the second way of a huge problem? My conclusion here is I don't know there are signs on both side. One thing here…

So look, Florida cases definitely ramping up. And these were you know, so this is seven-day average. And these are the actual cases. So they were huge, you know, 2000 new cases in Florida in a day. Not a good sign. But we see nationally deaths going down and we see in Florida deaths are not spiking, like the cases are and why is that happening? So one thing it could just be delayed, right? Hopefully that's not the case. It could just be delayed. It could be a few weeks from these deaths following that.

But this is this is a chart we put this together. I haven't seen anyone do it.

Florida has there a lot of data available. You could look at all the cases and put them in by age group.

What looks like is happening in Florida is young people under 44 are going out and catching this and older people – I have over 45 you can do the same thing I think over 55 would be the next group –so at risk people are not catching it so much right. So this could be okay, right? It is not as deadly as first thought, especially in young groups. So if this is the case, then this second wave is not necessarily a problem. All right.

Now I'm gonna go backwards another step, why it may be a problem.

This is a study from the CDC of Japan, they found 61 different clusters, specific clusters, and they traced them back to who started them. And so the gray here is cases, but the black is cluster so and who started them? So lots of clusters start with these young people, right? It affects old people, but if young people right, hold on, let's go back, if all the young people say okay, it's all right, we'll go out and get it. Those could be creating clusters that didn't go on to effect at risk population. So maybe it is a problem. Maybe the second wave is a problem. And I don't know. I mean, deaths are plummeting. We'll go to that.

From our financial perspective, you know, is this second wave going to lead to more shutdowns? And I don't know. I mean, some of these, some of these governors are pretty set on what they're doing. And I think it's also going to be a thing where, just like the first wave of shutdowns, if states start doing it, then other states jump on. If nobody does it, nobody shuts down. Right? It's kind of this cascading thing.

Doc: I looked at the data the last couple slides we've shown where this points out that deaths are plummeting. And that means the older folks are not getting as infected as often. The older folks know the risks and younger folks probably know risk as well. So you're not going and visiting grandma and grandpa in the nursing home in the middle of winter around Thanksgiving, Christmas, New Year's, Valentine's Day, and spreading the viruses that are seasonal, that kill old people. We're aware of this now.

So even young folks that are out and running around getting infected, we know there's no doubt in my mind, there's no doubt in my mind on the data and analytics for this show. They don't get, they don't die from it. If you're even young, young kids, this is very unusual in these kinds of viruses, much less death from this than influenza. So I'm really optimistic and happy that young folks are getting it. These people are outdoors and about goofing around, and are no their age stratification risks. I'm okay with that.

The next slide shows again, this is just deaths.

I wanted to point out, now that I've seen this... Remember, we talked about how you label it after COVID death? So someone in a nursing home they might have four other comorbidities, they might have lung cancer, they might have cardiovascular disease, diabetes, and they die, that someone tests them and gets the test three days after you die. Positive for COVID they've been waiting on the death certificate and I don't that's not proper form.

But New York City… This is an example, in New York City did a number… They just sort of mandated that everyone and they had this huge lump suddenly 3,800 mortalities. And that shows you how crazy that was at that moment and I think it's being teased out and people go back and look at this stuff. Physicians when they're doing case studies go back but… I know some of that [inaudible] so I'm excited about that.

Matt: Sorry I got lost here. There we go.

Doc: And this, this shows the same thing. Both the smooth and the actual numbers, it shows the death per million is way down.

If this continued every single day, which it's clearly not going to be, it would be the fourth… I think third or fourth most prevalent cause of death in the United States. But it won't… it won't get that bad.

So again, I'm… These are all good signs. Would you agree?

Matt: Yeah, yeah. I mean, they're good signs. We'll… But we're in the point now where we have to see what happens with this new stuff. And I think talking and we'll get to this seasonal one, I think is next. Talking about shutdowns and what we've learned. I don't think so. So, put me in the fear camp, right? Maybe I'm the guy who was afraid of the second wave. But from what we've learned, contact touch is not really a big spreader. We've got seasonality, right.

And I think we can just show this. We've talked about this before.

We've got seasonality. And it's droplet transmission. And I think what we've learned, if we could go back and start over, there was never, so there was never a need for a shutdown. I think if you do masks, and I know you're a mask skeptic in a sense, but you do, people are maybe overusing masks.

Doc: No, no! But anyway, here's the thing. If I knew that this Corona thing or any influenza was spiking, I tend to be very, very careful. You know this, I've written about it in Retirement Millionaire. I, any other time of year, I will share my fork of food with you. I'll share a mass plate family style, bring it. You can taste my wine. During the winter, you can't do that. You can't drink out of my glass during the winter.  When the waiter or waitress pours water in, I make sure they don't touch my glass because I don't want to touch my glass, someone else's glass, coming back to my glass. End of story. I'm okay with wearing a mask. I could go and get my backpack. I carry a mask in my backpack and have for 10 years, 15 years. So I don't wear it that often. But if I'm sitting on a plane next to somebody who's coughing and sneezing, my mask comes on.

Matt: Alright, so here… Well, let's go. We got some seasonality here.

Just back to my if I was policymaker.

Doc: Sure.

Matt: No need to shut down. everybody wears a mask, you stay as distant as you can inside. I still don't know what I think about large gatherings like sports and concerts, that might not be possible. But that would do it. That would put this thing below r1. And it would go away. Between seasonality, simple mask, and a little social distancing. We do not need a full shutdown. But there's a, you know, people are not willing to do some of those steps in some cases.

And now we've got some hotspots and we'll have to see if the death rates climb with it or if they don't.

Doc: And before, before we go away from this. This is flu, influenza is seasonal. You can see this goes from week 40 of the year to week one or two. And you can see right in the middle of Week One is the first week in January. You can see that blue peak. The red is the 2019-20 flu season that we're in and you can see that we got a spike in week one. And then we got us another spike, week seven, week eight. And this is a reasonably normal interaction between humans and these other zoonotic, as they're called organisms. That's a word for you, Matt.

Matt: And this looks like a… This looks like a shortened flu season because of distancing.

Doc: But they were calling it COVID-19 and they stopped measuring!

Matt: Oh, I would think it was because we're all inside because we didn't get the flu either. I've been thinking about that too. You know, I haven't gotten any colds I usually get colds because my kids are in daycare now. What's good? I mean, are we gonna have a nice easy, no-cold winter because it's sort of been chopped off. I don't know. I'll be good.

Doc: No human action interaction will be allowed. We'll kill viruses.

Matt: What if we all just did a three-month quarantine and wiped out all infectious disease and we did that like every 10 years?

Doc: Let's just ask your wife if she wants to be away from you…

Matt: Yeah, no, quarantine from each other. That's all… So Doc, this was one of yours. It's kind of, it's telling the same story.

Doc: I mean, look, if you want to stay away from me and Laura, Amanda and Jeff...

Matt: I'll stay out of the office. We could do that for longer if you want.

All right, so this was one of yours, Doc. Just, I think it's just showing that deaths are coming down off the peak, which is a good thing.

Doc: Exactly. Yep. Days from peak. We're trailing Italy. We have been for about 15, 18 days. Yep. Fantastic.

Matt: And so we may not be trailing as much as some others. And this is some global survey of how do you judge your government's COVID response? So you know, Canada's up here 80% or so people approve. We look to be in the 40% camp, which is probably you know, I don't think the U.S. population approves of anything over 40%. It's pretty hard to get people to agree, but so we're middling, as far as our response which seems fair.

And while looking at some survey stuff, this isn't maybe directly related to what we're talking about. But there's sure is a lot going on right now. And people are pretty agitated. And I found it interesting to see, you know, American pride is down, Doc, you pointed out, it's actually, you know, it looks like it's declining. But we went from 92% proud, obviously, sort of post-9/11 era down to 63% being extremely or very proud.

And this breaks down, of course, by political affiliation, and you know, Gallup titled this Republican Pride Drops, because it had been higher, and now we've got one, one notch down. You know, that could be noise. I wouldn't necessarily focus on that. But yeah, it's sort of, it's sort of happening on both sides of the aisle now. So it's a little worrisome.

Doc: So you know, look, look at the blue to me, again, going back to 03, where we're at 86 Republicans, and we're at 65 Democrats. And Democrats being proud of America have plummeted. And I would argue that the drop from 86 to 67 for Republicans is also getting a plummet, but it's definitely a 20 some percent decrease. So, yeah.

Matt: Yeah.

Doc: Interesting.

Matt: And that may tie into our global economic competitiveness index, right. We used to be the third most competitive economy and we've dropped down to the 10th this year. That's a one-year change from this IMD business school in Switzerland. They've been doing this for a while. You know, these I'm sure the, you know, this is a developed index. It's not necessarily a raw truth, but yeah, between trade wars and fed intervention, and all sorts of things. We're not maybe as competitive as we used to be.

All right, which leads us into the economy. Anything else on the virus before we go full economics numbers here?

Doc: Nope, let's dive into the economics.

Matt: All right, let's start. The big number this week was the retail sales number. Huge, huge growth in month over month, right, because obviously we're coming from a low level. And it's actually a pretty big resurgence to get back to where we were. So people got out there spending. So this definitely looks V-shaped; not everything does, but retail sales, big surge. 

And dig into those. So again, so April over May… Let's look at this. Clothing up 188%, which is crazy. Sporting Goods 88%, so people are looking to get outside. Furniture, people stuck in their house. So some of these are just crazy numbers huge, huge V shape in what people are out there spending now that they can.

Now with this is something we've been watching for years, this thing called a covenant. Loans have covenants and that, you know, something would be like if, hey, if you're going to borrow money from us, we're going to say you can't exceed borrowing what five times your earnings or something like that. If you do, that's considered default level, blah. But as the…

Doc: Just to explain it a little more in depth.

Matt: Yeah.

Doc: Covenants are a way of protecting the person loaning the money and it basically says, All right, well, if you get to, if you get in trouble, we need to be able to come and look at your books. We need to be able to make you do this and make you do that. So I don't lose my money that I'm loaning you. And it's just gotten the covenants as you can see from 10 years ago, have gone from what are classified as lite-covenant loans 20% to almost 80%. It's flip-flopped, which is wow, amazing.

Matt: Yeah. So these are worse loans, right? Yeah, these are… this is people, easy money loans have gotten worse than you would think as a loan holder. You'd say Oh man, I think things get bad. But at the same time, right…

The relief on these loans. So these are, these are reliefs. These are companies who are breaking those covenants they have either too much debt, their earnings have gone down, whatever happens, and that would normally be, you know, a default or restructuring, but now the lenders are saying, okay, we're gonna… we're gonna loosen things up and make it even more loose. So this is, this is a few things. I mean, it shows the kind of debt that's out there, it also shows sort of the non, you know, this is the… Contracts aren't ironclad, right? This is the real world and if you're going to say look, all these bonds are going to default, all these loans are going to default. Well, there's another person the other side of that and, and things get worked out. So it's sort of, to me it shows some resilience in our economy, but it also shows why we need it is because there's a lot of debt out there.

And the Fed is buying bonds, right? Every year… there's all this money out there, but there are actually bond defaults happening.

And again, that's a bad thing because we don't like companies to default. But it's a good thing because we do like a real economy where people who can't pay back their money, end up defaulting, right? We don't want to support everything, on and on forever. Okay. And rest of world defaults, you know, huge, huge, huge, huge jump there. So, we talked last week about the virus and the international situation being worse. And the economic situation is worse too, especially since they don't have the dollar or they can create on their own and support everything that they need to.

Doc: Right.

But as far as support goes, the Fed… The growth in the Fed's balance sheet is slowing right? Huge surge in March, and it's about flat now. So the easing is slowing. That's, I take that as a good sign. I mean, we didn't want this thing to be a runaway forever. We wanted to slow at some point. But there's still a lot of money out there.

Matt: But most fund managers… This is basically a survey. Most fund managers consider the market overvalued. And I mean, when I say that, we're talking more overvalued than, you know, there was a boom here, more overvalued than dot-com, more overvalued, obviously then that prior to the financial crisis where people were pretty sanguine. So you know, they… It's not a surprise. I mean, we've, it's very obvious that…

Doc: We've never been here before, we've never been here where a virus, where you have social strife in the streets, and we got the Fed just say gasoline, here we go.

Matt: Yeah.

Doc: Have money! I talked to you earlier this week, I was talking about some of the covenants in the federal government allowing banks to loan money and normally had to take a piece of the loans. Now they can just resell them to the Feds and it's gonna, it's almost… Reminds me of the days of the mortgage crisis where it's just like, let's just create the loans and move them off the balance sheet. No risk, give the risk to the Feds, whew!

Matt: I know. And they, you know, there were lessons learned that time and they tried to put… they tried to put… they tried to design it so that the banks can't do that. But you can't. Like, that's the game like they will figure out a way to do it. They will find out. You know, when people were trying to get these home loans into these CDOs and stuff like that, they knew they didn't try to find good borrowers. They knew how to get the exact number to get this thing approved, and the system gets gamed, you have to change it again and again. So yeah, there's gonna be some defaults in there.

But, you know, not everything's a financial contagion, like 2009, but they'll… Yeah, there's gonna be some bad loans. So what do you do? Do you buy… Do you buy value or growth? Or how do you survive this thing? Well, this is a decade by decade breakdown of how value beat growth. Okay, so if this is going up value did better than growth. And it does better almost all the time, except the 2010s. Right? So that's this is the classic death of value investing. And this chart isn't really specific to the current scenario at all.

Doc: Do you think that's because the moral of the moral hazard that we've seen where value really isn't valued because in growth there's no risk? Like, you know, you can get more money, you get refunded you can…

Matt: Yeah, yeah. So there's a few things right? So is it… if you can, you can make your business grow by throwing money at it and advertising, but you need to get that money. So the era of easy money, forgives, maybe benefits, growth companies and doesn't… They don't kind of get their comeuppance in the end and so that's part of it. I think, too, I also think the markets are just more efficient right, this is, this is the information age. And I think if you see, if you find a company trading at eight times earnings, it's because it's a bad company and everybody's had their eyes on it. And it's very hard to find something that's hidden, it's very hard to find hidden value now. So I think that's part of it.

And I also think, I mean, businesses changed a lot here. And you can just I mean… So put into one word like technology, right? Tech companies are different, like, what's happening with Google, and Facebook and Amazon and the size they've got, and the reach they've got and the power they have over competitors is not like what's happened before. And they can do this without large amounts of fixed assets. So if you're talking… So this is specifically talking value is low price-to-books. You know, back here it was, you know, railroads and manufacturers and all these things, and they had lots of assets and they could have, you could find value there. These companies don't have those kind of assets anymore. So growth does have more…

Growth can bring you more value than something with a lot of assets and a good price-to-book ratio. So I don't think you're going to see this again. I don't think, I don't think value works like it does there.

Doc: Hmm.

Matt: Will there be a resurgence of value? Is this gonna keep going? Is next 10 years gonna be like this again? Probably not. There's gonna be some return to value, but it's not… I don't think it's gonna be like it was in the old days. And there's another factor you could use, so you can call these factors values of factor growth, momentum size, but I think quality… We've written about this, quality is what you want to look at. I think it spans these decades better in quality would sort of be high profitability relative to assets. I'm you know, we've gone on way too long about this.

Doc: No, no, I think it's interesting question because quality is important and then is book-to-market or price-to-book has that gone away? Is that a – And will it go away? I would argue it's been supported. And we haven't flushed things out so that you can go and pick up, at least at the first of January at the first of the decade, you know that this was a little bit. I don't want to say, escapist, but it's a little, you know…

Matt: Yeah, it's a little, it's a manufactured test. But you do make a good point. I mean, price-to-book is probably, essentially dead. I mean, it doesn't work. You know, there's been accounting changes and assets don't matter so much anymore. So maybe there are other valuations that can, metrics that can work better. Price-to-book is really tough. But if you want to test to the 30s and 40s, 50s, like price-to-book is what you need to use, because it's simple, and it's available. So that's a good point. I mean, I can't tell you the last time I even really looked at a price-to-book ratio and thought it told me anything at all. So that's a good point as well.

Doc: You remember when we first started working together, I had that sort of factors I looked at and one of them was price-to-book and relative to last five years precisely because of this stuff, and I just kind of had to ignore it. It didn't help anything in any way, like it didn't find companies that I would be interested in if you dove deeper. It didn't suggest to me any buying opportunities yeah it's uh it's interesting. And it might be because of brand. You know, brand and equity has created this opportunity.

Matt: Yeah

Doc: Yeah. All right. Well.

Matt: Well, I mean, this was a this was a different conversation I think, but I hope it was a was a good one. We're kind of all over the place but I hope it was interesting.

Doc: Yeah. All right. Well, thanks Matt for going easy on me this time.

Matt: No, thank you. You're the boss. You can, you can just tell me I'm wrong and I have to be.

Doc: I'm the boss, yeah, that's like you saying you're the boss in your household.

Matt: That's a good analogy. I'll take it.

Doc: People, you have questions: Let us know and then again, share with friends and family, your kids, your parents. We write short 500, 750 word snippets. Give it out for free to get people… to give people a taste of what we do when you pay us. So anyway, I've enjoyed it and we keep saying every time we close down next couple days, we're gonna do this again. I don't know, maybe we'll do a baker's dozen, do 13 of them.

Matt: Yeah.

Doc: We'll see how the week goes, eh?

Matt: Yeah. All right, thanks a lot, Doc.

Doc: Thanks, Matt. Bye.