How to find hidden value in an efficient market

Finding hidden value in the equity markets isn’t easy. Most sectors are fairly valued… most of the markets are efficient… and most stock prices reflect that.

The keyword here is “most.”

Because if you know what to look for (and where)… you’d be amazed at what you can find. You just need a sound process for evaluating companies and sectors.

My guest on today’s episode is Jason Gould, portfolio manager at Lifetime Wealth Management. Jason loves to scour to market’s underbelly to find asymmetrical risk/reward setups and stupid cheap stocks [9:50].

And today he shows us how he does it.

Transcript

The Mike Alkin Show | 61

How to find hidden value in an efficient market

Announcer: Free and clear of the chatter from Wall Street, you’re listening to Talking Stocks Over Beer, hosted by hedge fund veteran and newsletter writer Mike Alkin, who helps ordinary investors level the playing field against the pros by bringing you market insights and interviews with corporate executives and institutional investors. Mike sifts through all the noise of mainstream financial media and Wall Street to help you focus on what really matters in the markets, and now, here is your host, Mike Alkin.

Mike Alkin: It’s Monday, May 20, 2019. Nice to visit with you. Hope you had a good weekend. Mine was busy. Had a lot going on. I had a failed negotiation with my wife because on Saturday we had two family communions, one on my side of the family and one on her side of the family, that we had to go to. Nieces, nephews. Yeah, nieces. I started negotiating, because my son is a lacrosse player, and lacrosse, where we’re from, is pretty much like … it’s important, meaning it’s a big sport here in the Northeast and Long Island, and it’s just part of the fabric of where we are. The local University to where I live was hosting an NCAA, the college quarter finals, and we were having some big time programs here. Virginia, Maryland, Duke was here, and so it was the biggest lacrosse programs there are, and my son and his buddies were going to go, and a lot of guys from the town, a lot of my buddies were going, and the games were Saturday afternoon.

I thought, oh, okay, so I’ve got to, about a week ahead of time, start prepping life, like, okay, I know we’ve got these communions, but my daughter and her could go, I thought, and I was going to use the how often do you get to see Duke, and Virginia and Maryland play right here? I thought I had a shot at it, and started working it a week before, and she’s like, “Well, you know, you can’t miss their … They’re our relatives, and we’re close to them.” I said, “I know, but you know, maybe because it’s such a special treat … You guys will be there. They don’t care if we’re there.” She was like, “Of course they do.”

Well, as it went on and on and on, I tried to negotiate, negotiate, for both me and my son to go, and I could see I was running through a brick wall, and so I had to keep regrouping, and thinking of different things, and I dropped in, saying, “Oh, so and so has a communion. I can’t believe that she was letting him go and not miss the communion.” She was like, “I’m not her.” I was like, “Damn.” That kept going, and finally, I finally got it to where, on … I think it was Thursday I got it down to where, “Okay, fine. Fine. Just go. Go to the games. Buy the tickets, go to games, and fine.” My wife wasn’t happy, but …

But then my daughter, she started on. My daughter started in on it. She made my wife look like nothing, like my wife was being meek, because my daughter was unrelenting. “You have to go. You have to go. I can’t believe you’re not going.” She finally wore me down. I got it so that my son was able to go. He stayed, and I felt guilty, because my daughter made me feel guilty, like she should have, because I should have not wanted to go to lacrosse games, because my wife is usually right, and so my son went. Another dad took him and his buddies. They went to the game.

I went to the communions, and it was … You talk about different worlds. My family heritage is Italian on my mom’s side, which is who I grew up with, my grandparents, and so I associate as Italian. My grandparents were immigrants, and everyone was … I grew up eating Sunday dinners at two and three o’clock in the afternoon of spaghetti and meatballs, and every night we had a different dinner. Old school Italian, or Italian, as they say in certain parts of the country. But very, very Italian, and that’s where the communion on my side of the family was, was at a very, very Italian … I won’t say the family’s name, but it’s very Italian. The food, the neighborhood. It was like going old school, so we did that in the early afternoon.

We then went out to my wife’s family, which is just the opposite. Very relaxed, not Italian. It’s an Irish background, and so it turned out to be a great day. My wife was right, as usual. I was wrong. My son had a nice time, and so it was good. Then that was pretty much it. Yesterday, my gosh, was get the yard ready. Right? A power wash for a few hours. Just power, power, power. I love power washing. If you think about, as an investor for a living, you don’t have … yeah, every day there’s a scorecard, but it doesn’t give you the end result, because I don’t care. I mean, if I’m looking at a long or a short, I’m way early, and I’m going to scale into a position. It’s going to take a lot of time. Especially on a deep, deep value long, right, it could be two years, three years, where your time horizon is, so for a long time, right, you’re fighting the tide, and you’re buying your positions over periods of weakness, and same thing on the shorts. You might be six, nine, 12 months early, maybe a little bit more, and you’re scaling in.

You go in, and everyone likes the stock, and you’re putting it on the sheets, you’re putting it, and making a position out of it, but it’s small, and the stock goes against you, and you add a little bit more, and you’re working the position. You’re learning more about it, but until that catalyst comes, for a long time, you’re early, and there’s a point where early means wrong, but there’s a point where early means you’re growing into the position, but your work hasn’t been proven right for quite some time, and so the thing I love about doing manual labor is it’s done, and you see it, so man, you put a power washer in my hands, I just love it. I mean, I can be out there all day. In our back yard, with our slate and a power washer, and you can see the dirt come down, and I’ve got the house going, I’m in heaven. Get the furniture out.

That was my afternoon. Perfect. Watched a little hockey, watched a little basketball last night, so a really nice, relaxing weekend. I find physical labor like that very relaxing. My back doesn’t, but I do, mentally. We had that, and then we’re seeing just a lot of noise in the markets, with all the stuff that’s going on. I talked last time …. I think it was about why I find those sectors that are very uninteresting at the time, or way out of favor, that appeal to me, and there’s a guy I’ve gotten to know this year, who I talk to, and I’m really impressed with his level of work, and somewhat like-minded, and I don’t always like to have like-minded guests on, but someone who I think does a really nice job in understanding, and does deep dives on companies in myriad industries to really understand the fundamental drivers of the industry, both from a macro economic standpoint, both incorporates macro, the global macro, but then the industry macroeconomic drivers, and then takes it down the company levels, and then really understands, and I think that’s really, really important.

That’s how I approach everything. You start high and then work your way down, and then if you’re on Twitter, my name is FootnotesFirst, so I like to dig into the footnotes. That’s where the good stuff is. But I thought today we’d bring a guest on that really has a very interesting viewpoint of the world. It’s not popular, always, because he’s a contrarian for the most part, right? He looks at things with a skeptical eye, which is exactly what you need as a fund manager, and somebody that’s investing for a living, and so we’re going to bring him on to talk about it, and he’s not a hedge fund manager, but he’s an RIA, registered investment adviser, and his firm manages a few hundred million dollars, and he has some very interesting takes.

We’re going to bring on now … we’re going to start with Jason Gould, who is a portfolio manager at Lifetime Wealth Management in Dallas, and Jason’s going to talk to us about some industries that he thinks are interesting, some companies he thinks are interesting, and we’re going to spend some time with Jason. Without further ado, Jason Gould, welcome to the podcast.

Jason Gould: Thanks for having me. Long time listener, first time caller.

Mike Alkin: It’s great to chat. I love speaking with guys that both know the long side and the short side, and have a little bit a cynical view of the world, because that makes you a good long investor as well, but … Lifetime Wealth Management, you guys are based out of, I think, Rockwell, right, in Texas?

Jason Gould: Yeah, in Dallas Fort Worth. [crosstalk 00:10:19].

Mike Alkin: Dallas. Dallas Fort Worth. Yeah. You guys are an RIA, so I’ll let you explain to people what that are, but folks, Lifetime is an RIA. They manage about 100 million dollars in a passive investment management style, and they also offer their services as kind of like an outsource family office, which they advise another 100 million dollars in assets. Jason, why don’t you share with listeners your background, and I know you also … it’s required with you with your firm that you need to read a disclaimer, so folks, Jason’s going to get a disclaimer out of the way.

Jason Gould: Yeah, let me do the housekeeping. I’m the portfolio manager of Lifetime Wealth Management PC. Any views and opinions expressed here are as of the date recorded and should be not viewed as an offer to buy or sell any securities. Any views and opinions could differ from those of Lifetime Wealth Management PC or its affiliates, and are subject to change without notice. Lifetime Wealth Management PC has no obligation to provide any updates or changes. Any opinions or views that are shared herein are for informational purposes only, and should not be relied upon as a basis for investment decisions, and clients and employees of Lifetime Wealth Management PC may maintain positions and securities [inaudible 00:11:36] this podcast.

Mike Alkin: Awesome. Awesome, man.

Jason Gould: Just to cover our bases here, but yeah, I’m the portfolio manager. I got in touch with Mike after his podcast about books, because I got my start not a traditional way. I started out working at [inaudible 00:11:58], kind of in customer service and trading, and got my series 7 license, and started, but that wasn’t really for me, but I never really had the traditional investment banking analyst route, and so I relied heavily on books, and a lot of the books that you mentioned were some of my favorites, too. Books have always kind of been my mentor throughout my career. Yeah. I started out at [inaudible 00:12:27] in 2006, and decided to go get my MBA, and that was right around the financial crisis, and I kind of just read everything I could get my hands on around then.

Mike Alkin: Yeah.

Jason Gould: Finished my MBA. Became a hedge fund analyst, working primarily in commercial real estate, and some macro. Then moved on to work in proprietary trading, and now I’m a portfolio manager, so I’ve kind of been across the gambit of the industry. I’ve got my MBA. I’ve also got a CFA charter. About all the letters I think I’m going to get behind my name.

Mike Alkin: Talk to people. Tell us how you think about setting up a portfolio, right, and I guess your clients, as an RIA, you have clients, I’m sure, that run the gamut, from smaller clients to bigger clients, in terms of asset size, but you and I talk a lot, or we communicate a lot, on different type of companies. We tend to focus, when we’re communicating, on shorts, but we also talk deep value uranium when we’re conversing. How do you think about structuring a portfolio, and where do you layer in your macro view of the world, and how does that flow down into how you express that view in a portfolio?

Jason Gould: Sure. It was kind of fortuitous that I was getting my MBA during the financial crisis, and so I was trying to understand everything that was going on in the world around me, which led me down a lot of rabbit holes, but, as a result, I read everything I could get my hands on macro. I read all of the Jack Schwager books, but that kind of is the background for everything that I start out with. I mean, I want to have at least some understanding, or some idea, or some view. It could be wrong, but some view, at least, on where the world is on a whole, and so that kind of is the background that I want to start with when I’m going to start doing portfolios, and then, beyond that, I think of everything in terms of risk and reward. If I think something’s going to double, I’m willing to risk a certain amount. If I think something’s going to go up five times, I’m willing to risk more. Everything in my portfolios are kind of constructed that way.

Mike Alkin: In terms of industries, I mean, you and I have talked about different industries. Do you consider yourself a generalist? Willing to go anywhere and just look at anything?

Jason Gould: Generalist with a value bias, and so, similar to you, I have no problem investing in things that are near unloved.

Mike Alkin: Yeah.

Jason Gould: I’m not trying to win any beauty contests.

Mike Alkin: Yeah. [crosstalk 00:15:38].

Jason Gould: I really just care about the fundamentals, right?

Mike Alkin: Yeah, yeah. Or be the popular guy at a barbecue [crosstalk 00:15:45].

Jason Gould: Oh, yeah. I’m the oddball. I really don’t have any problem with being the oddball at a party, and being around a bunch of people that love Tesla, for example, and [inaudible 00:15:56] all the problems with the company. Yeah, I’m missing that social gene that most people have, I guess.

Mike Alkin: What’s interesting you now? I mean, you and I have talked quite a bit on Tesla. I mean, why don’t we start there? It’s unlike a company I’ve seen. I’ve been doing this now a long time, and I’ve had some shorts, and I’ve been … Years ago, when it was much easier to find companies that just didn’t make sense, or were just saying things that were nonsensical … you know, back in the early 2000s, you had a handful of these, or more than a handful. But the thing about Tesla is the fundamental story is completely disconnected from the narrative, and it has gone on so far longer than people have thought, and the thing that …

It’s interesting, because I don’t see … you know, for decades, I didn’t deal with retail investors. I wasn’t exposed to that, and you go on Twitter, and you see these people who seem smart, hardworking, decent folks who believe in this dream, and it’s the church of Elon they belong to, and you look at this and say, “My God, you’re getting walked off a cliff,” but somewhere there’s a disconnect between fundamentals and narrative, and, I mean, it looks like now it’s finally starting to come home to roost, but what’s your take on this, because it’s been a big battle, and you’re a pariah if you take the other side of Elon, you know, so how do you view it all?

Jason Gould: Well, I think the market’s kind of wising up, and it’s starting to agree with the bear narrative.

Mike Alkin: Yeah.

Jason Gould: I spent an ungodly amount of time on Tesla last year, and now you’re starting to see even the sell side come out and say things that the bears have been saying for six months, seven months, a year, and it’s kind of just come into the narrative. I think the biggest thing that most people that are invested in Tesla don’t understand … the balance sheet hasn’t concerned them thus far, but I don’t think they really understand. Tesla’s overvalued at $100 a share. It’s probably overvalued at $50 a share.

Mike Alkin: I mean, you want to go to tangible book? Maybe it’s $25, if it would survive long enough.

Jason Gould: Yeah, it would.

Mike Alkin: Yeah.

Jason Gould: What’s tangible book on a bunch of assets that are losing three or four billion dollars a year?

Mike Alkin: Right. Yeah.

Jason Gould: Then is it the scrap value of … I mean, no-one wants to make cars in California, so it’s kind of unrealistic, I think, for somebody to expect the bears or the bulls to start thinking, “Oh, it’s a bargain at this price.” Well, maybe Elon comes up with cold fusion or something and rolls it in the Tesla, and that’s kind of what the game has been, it’s how many rabbits can Elon pull out of the hat, and something’s changed here in the last three or four months, where all of a sudden, all the rabbits out of the hat are not really responding in the stock price, and so we’ll see.

I’m fascinated with it. I don’t spend as much time on it as I used to, but, because I feel like I know the story frontwards and backwards, I still am able to kind of read and digest everything, and I still have a small personal position in it. But yeah, it’s been a fascinating experience, just watching it all unfold, and I think the psychology is almost as incredible as the financials.

Mike Alkin: Absolutely. I read somewhere on Twitter months ago, and somebody said … and I loved the saying, and he said, “I forget how much I remember about Tesla,” because the story, right, has just constantly changed, and I know, like you say, you’re talking to people who are not, let’s say, in the financial markets, where they don’t have a vested interest in it, but when the subject comes up … I’ll give you an example. I’m sitting in my barber, in my hometown, where I go every few weeks, and I’ve been going there for many, many years, and I’m sitting there, and the guy next to me is in the chair, and he’s talking to the barber. He said, “Yep, just went and looked at a Tesla.” He said, “Boy, I’ll tell you what, that’s some car.”

Now I’m sitting there, and now my son is to my left, getting his hair cut, and he looks at me, and he smiles, and he mouths to me, “No. Don’t. Don’t.” The guy’s going on, and he said, “Well, it’s a stretch for me. It’s a stretch, but I think I’m going to do it. The quality’s unbelievable. Elon Musk is … he’s brilliant,” and he’s going on and on. Finally I said, “Don’t do it. You can’t do it.” I don’t know this guy from Adam, and so now I’ve got the whole barbershop listening to me, but I started to explain the story, and as you’re doing it, as you’re trying to explain the story, it bounces all over the place because trying to stay up with the narrative is crazy, and there are some many things that are just so blatantly obvious to somebody who has financial, analytical acumen, where it doesn’t connect with what’s being said.

But to me, though, the retail investor that gets hurt in this name, I feel terrible for, to a degree, because when you go on Twitter and you see … they talk about FUD. It’s fear, uncertainty, and doubt that the bears spread, right, and this FUD saying, but they don’t listen to cogent, analytically sound arguments. For those people, I don’t have any empathy, because there is an arrogance, and an Elon’s saving the world type of thing, which is bullshit, right, because I like [inaudible 00:22:25]. Why wouldn’t you want to have clean air-producing vehicles? This holier than thou, I’m from the church of Elon stuff, I have zero, zero, zero tolerance or empathy for, because when people are presenting an argument, it’s not FUD. You’re playing the capital markets folks that … you’re playing against some smart people who know how to do analysis, and they’re trying to share some insights with you that’s going to help you from getting run over.

But then there’s the others who just don’t know. They don’t have a vested interest, and they may have a little bit of money invested, and those people I feel badly for, because they may not even be paying attention to what the bear case is. They might not even know about it. But the professional investor, I can’t get my head around a professional investor that, at this point in time, right … because it’s been a series, right? If we go back on Tesla, it’s the roadster that comes out first, and you get the model S and X, and my all accounts, the S and X were very expensive vehicles, but nice cars. I’ve been in them, I’ve driven them, and, like, wow, yeah. I mean, geez, it’s like a rocket ship. It’s pretty cool. Musk’s mistake was his megalomania needing to become a car for the mass market, and that’s a shitty, bad, hard business, and that $35,000 deal, minus the subsidy, and we know the story.

But, at some point in time, one of the things I try and stick to, and you have to stick to religiously, is thesis creep. When the reason you want something changes, you get out, and this story continuously gets pushed to the right, from production numbers, from being able to deliver on any promise. I can’t get my head around the professional investor who continuously keeps financing these lawsuits, and if you think about recently … Why don’t you update people recently on what’s transpired, and this pivot, which is just … the pivot is crazy.

Jason Gould: Yeah, yeah. I think you’re definitely right, and I think that’s why the price is actually finally starting to at least move in the direction of close to what could be becoming an option value on future potential for the company is.

Mike Alkin: Yeah.

Jason Gould: Now you’ve got all these sell side guys that have been writing reports about how the Model 3 is going to be profitable, and as soon as it becomes clear that that’s probably not going to happen, there’s a pivot, and now not only has Elon pivoted, but this kind of narrative that all the sell side guys, they’re saying, “Well, are we going to pivot our narrative to this thing with the whole [inaudible 00:25:12], or … ” It’s been blatantly obvious for a while, but I think now it’s just so front and center that even the biggest bulls can’t ignore it, right? When you’ve been pitching for two years that the Model 3 is going to be self-financing, and there’s a [inaudible 00:25:34] of unlikely growth, and now all of a sudden it looks like demand’s probably capped out at around 250,000 cars a year, and they’re probably going to lose $3 billion doing it, and their S and X line are … they’ve slashed the prices, and the [inaudible 00:25:50] have dropped off a cliff.

It’s just tough for the sell side to change gears that quickly, and, yeah, I don’t even want to venture a guess on what anyone on the buy side is thinking of holding this stock, particularly if they have a mutual fund structure, where they have outside investors. I think the risks of the early … all of the dangers have been so well documented, it’s almost inevitable that those are going to be … they’ll end up in court at some point, from some investor saying, “This was obvious. What were you doing? What were you thinking?” Because, as much as people think they’re supporting the mission, once you start losing money, the mission goes out the window, and I think they become class action planners pretty quickly.

Mike Alkin: Yeah. Yeah, no, I agree. I mean, the thing here with this pivot, too, now all of a sudden making the Model 3 is meaningless, right? I mean, Musk is basically saying, I mean, “Why get uptight about margins? I mean, we’re going to have a million robo-taxis on the road in 2020, and we have this technology that no-one else has,” and you’re just like … People finance, but the thing is, right, and we just saw recently, they finance a capital. They raise net 2.4 billion in combination and convert in equity, convertible to equity, and they raise it, but on the conference call, the invite-only conference call that the bankers had, Musk basically came out and said, “We don’t really need the cash, it’s just good to have for a rainy day, but our cashflows will take us forward,” and here, two weeks later, he’s sending an email out to employees that was reported by CNBC and others, saying, “We have 10 months cash left.”

I mean, that that’s allowed to happen is staggering to me. I mean, I have never seen stuff like that occur, where the blatant head fix, you want to call them lies, whatever you want to call them, just go unpunished. It’s stunning to me.

Jason Gould: No, I think we could have a whole episode on the amount of regulatory failure that’s been involved with Tesla, from the NHTSA, to the FCC, to you name it. Pretty much they’ve come in the cross phase of almost every regulatory, and nobody seems to be willing to challenge the company. It’s bizarre, but the whole story, when you know it front and backwards, it’s pretty obvious that the … I mean, the pivot was for one reason, and he’s pretty much got to come out and just Lidar because [crosstalk 00:28:49].

Mike Alkin: Folks, what he means by Lidar is-

Jason Gould: [crosstalk 00:28:51] go back and change all the radars, or all the cameras on all the cars, and they pre-sold that service.

Mike Alkin: Exactly. Yeah.

Jason Gould: They don’t have the [inaudible 00:29:00] to either pay it back or to switch it and put Lidar into all their cars. I mean, they’re kind of stuck here.

Mike Alkin: Yeah, as I say, well, folks, what Jason’s talking about is … this pivot we’re talking about is … you know, this was about producing … you know, Musk wants to get the 500,000 car … it used to be a million, right? It used to be more, but the numbers always change, but it’s about mass-producing the Model 3 vehicle, and now that that’s been become more and more of a challenge, and what the company did, what Musk did for these last few years, when he introduced the Model 3, was focus everyone on production, right? It was always production-focused, with the assumption that demand would be limitless, and so demand was as far as the eye could see, and they took those half a million reservations, right?

But that was on a $35,000 vehicle which was going to have a $7,500 federal tax subsidy when you go back a few years, and that’s what it was for. Well, they couldn’t produce the $35,000 vehicle profitably, so they kept pushing it out and pushing it out, and the cars were coming out at the Model 3. Depending on the version, they were coming out at different … you know, 50, 55,000, and even a little bit more. As it became clear, in the back half of 2018, as cash was running really tight, which Musk has admitted publicly to, and the tax credit was getting cut in half on December 31st of ’18, they pulled forward all this demand, and they threw in the kitchen sink, and they lowered prices, and they had a good quarter, and it made it look like that was sustainable.

Well, demand is limited. I mean, the thing is, I don’t know how it is in Dallas, Jason, but here in New York, where I am, in the area I am, it’s a fairly affluent area. I’m not, but it’s a rather liberal area. It’s one of these things where you would think that you’d see Teslas everywhere, similar to you see in California. I’ve seen a handful. That’s all I see. I mean, half the cars sold are sold in California. Even the Model 3, right now, is kind of a niche market, at $50,000, at 45,000, and for listeners who don’t know. It’s all been about focusing on production, and they would jam through these cars.

Remember, folks, you’ve heard me on the podcast before, they were building cars in a tent to try and get to 5,000 a week. Well, the reality is demand is limited for these cars at these prices. Recently, what Musk has done is … this whole thing that is about autopilot, and the cars can … some people think these cars can drive themselves, and they’re not even close to being able to do that. There’s some ability, on very limited roadways, where the car can go on its own, but it needs to have the driver aware, and the driver be ready to put their hands on the wheel.

Well, when you look at Waymo, which is owned by Google, and other car makers, they use a technology called Lidar, which is a sensor technology, and if you ever see some vehicles going around with big, moon-shaped things on the roof or on the back, those are sensors, and they’re getting smaller and smaller, but that’s the recognized technology. Well, what Tesla does is use cameras, and there’s a big debate, and we’re not going to get into a technology debate, but, basically, Tesla doesn’t have that capability in those cars, so, for them, all these cars they’ve put out there, as though it’s autopilot, recently, as far back as March or April, Musk was starting to say, big announcement, essentially, that if you read the tea leaves, that we’re going to change the world at full self-driving, and it’s going to be completely self-driving.

Well, a lot of people who own these cars think it is completely self-driving, but the reality is, back at the end of April, they had an investor day where they talked about the Lidar technology being a fool’s errand, and it’s not going to work, and that they have this new chip and new technology, it’s camera-based, and it’s the way of the future, and anyone doing Lidar is … it’s not going to work. As a result, if you own a Tesla car by 2020, according to Musk, you’re going to have robo-taxis, and in these robo-taxis, you’re going to be able to go to sleep at night, and send your car out to pick people up and make thousands of dollars a year, and therefore your car is an appreciating asset. That’s the pitch, and no longer does it matter if you are able to, and no longer does it matter about how many cars they produce, because if you buy a Tesla, you’re going to own an appreciating asset. Slamming the other technology. I mean-

Jason Gould: I think it’s just laughable. I mean, we could do this for another number of the claims that Musk has made, but just the idea that a car is going to be an appreciating asset, that they’re going to be even capable of self-driving … One of the tidbits of … there was an exchange in the Q&Q of the autonomy day where Musk was pitching this, and someone asked him, “Well, will someone need to be in the driver’s seat while it’s out being a robo-taxi?” He said, “Yeah.” Basically, the person who gets picked up for a robo-taxi is going to have to sit in the driver’s seat of someone else’s car, and let it drive someplace. The person getting picked up is going to be the safety driver. None of it makes sense. You go one layer deeper beyond whatever he’s selling, and you can kind of tell it’s a lie.

Mike Alkin: Kind of scary, though, that people actually … yeah, that he’s kept the story afloat for all this time on that type of stuff, so it’s a crazy thing. But it goes to show, as an analyst, as a portfolio manager, you’ve got to come at everything with a degree of skepticism, right? Trust but verify, right? You know, I go back. I blame everything on fed policy over the last 10 years now, whether it’s the shale plays with easy money, or it’s this with people just … you know, the rebirth of Silicon Valley, and up from the ashes again, and now you’ve got these guys out there talking about what a genius he is. I mean, it gets a little crazy sometimes in these bubble-type periods where people lose sight of the facts. Anyway, let’s talk about some of the things that you’re seeing the … let’s talk about some things you like and some things you don’t like. Yeah. What’s interesting to you right now?

Jason Gould: I’m interested in commodities right now. It’s not my normal wheelhouse, but there’s a lot of different commodities that are just starting to … they’re getting so beat down and so unloved that, if you don’t like them now, you’re never going to, right? Oil and gas is an excellent example. It’s kind of similar to uranium, but probably a little less extreme, but the oil and gas sector is just so unloved right now. Even people that specialize in the industry, they’re just so beaten down, and they don’t really understand how anybody’s ever going to make money on them ever again, but we’re talking about an energy source that’s kind of the lifeblood for [inaudible 00:36:35], and everyone’s kind of just acting like nobody’s ever going to make money on energy ever again.

It’s a very complicated situation, but there’s companies with 20 and 30% free cashflow yields when oil’s trading in the low 60s. There’s value to be had in the market, if you’re willing to look and do the work, and I think one of the reasons this situation even exists, and we’ve talked a little bit about the shale plays, and how different the economics of shale are, but that’s probably a big reason why this even exists, because there’s been some bad actors in the shale patch, and people don’t know what value is. It may look like value on the balance sheet, but when you can’t trust those numbers, nobody really knows how to value things, and so that’s one of the reasons I think we’re in this situation, is so much of the new supply growth is coming out of the shale patch, and it’s still not really all that well-understood.

Mike Alkin: Well, I tell people-

Jason Gould: [inaudible 00:37:47].

Mike Alkin: Yeah. What I try and say is, look, because of low interest rates over the last decades, and new technology, obviously, with horizontal fracking, the US has, in theory, become, people believe, energy independent, because of this shale play, tide oil, and they’re able to extract a lot of oil and gas, and produce like crazy, and they’ve been financed, despite the fact that they’ve lost hundreds of billions of dollars, and two out of every three of these shale players are losing money regardless of the price of oil, and yet, because of the yields on this debt, on the higher-yielding paper, they’ve been able to finance this, and when you’ve got the climb rates of 35, 40%, that require this capital intensive drilling just to maintain your production levels, I mean, that becomes almost like a fool’s errand after a while, where you’re constantly throwing good money after bad money, you know?

What are your decline rates for conventional oils? Single digits, versus 35 or 40 for the shale plays, but we’re coming up against an interesting time now, right, where you’ve started to see some accountability come into this sector, where people are saying, “Hey, listen, you can’t produce for production’s sake,” right, because you know oil and gas, it’s always about how much more can you produce, but when you’re producing, and it costs you more to produce at any oil price, it’s kind of silly. There’s a few hundred billion dollars in debt coming [inaudible 00:39:21] over the next few years, and it’s either going to be more expensive debt that these companies are going to have to refinance, or some of them are just not going to be able to do it. How do you see this evolving?

Jason Gould: Yeah, I mean, I think it’s already happening.

Mike Alkin: Yeah.

Jason Gould: I’ve talked with some bankers that have … historically, they’re willing to lend 65% of PDP inventory, and you’re starting to see that kind of paper just not even get rolled over anymore.

Mike Alkin: Yeah.

Jason Gould: It’s kind of complicated, but because of the dynamics of shale, and the decline rates, there isn’t any free cashflow left over to service the debt, even though, on your balance sheet, you may have this massive industry. Bankers, I think, in particular, are starting to wise up, and I think equity holders are starting to wise up, too, and say, “Well, when is there ever going to be free cashflow? I mean, yeah, it’s great that you’re growing your reserves, but that’s been the case for three years, and we haven’t seen any free cashflow.” They’re getting pressured, and you give a Texan money, they’re going to drill a hole in the ground. It’s like a fish swimming in water.

But at some point, when the gain stops … and this is happening both on the credit side and the equity side. I mean, you go through all the conference calls of all the shale plays, and almost everyone is talking about drilling within cashflow, so they’re drilling within their operating cashflow, pretty much assuming there’s not going to be new capital coming in, and maybe they’ll roll some debt here and there, but the private equity game, where they raise a bunch of money, and flip the property, flip the land, they maybe drill 10 or 20 wells and flip the acreage to a publicly traded company, is over.

Yeah, I think that’s going to be part of it. I think the biggest thing that’s going to come out of this is people are going to realize that we’re probably a lot closer to the peak of shale production overall than is kind of being modeled then by the EIA, and that’s going to feed into the overall oil market. Because prices have, A, been volatile, and B, kind of been stuck in a fairly low range, there’s been an underinvestment in things like offshore oil and longer-lived oil assets. Once, I think, this story gets out in the open, the price of oil will re-rate, and it’s going to have to. Similar to uranium, right? The price has to go up to incentivize [inaudible 00:42:13] and I think that’s …

Mike Alkin: You think about the lack of investment that you’ve seen over the last decade in offshore projects. I mean, upwards of a trillion dollars that have been shelved, and at the end of the day, you still get 30 or so percent from offshore, and you need it, and so it’s interesting, but yet some of these companies and some of these service companies the trading below tangible book value, and trading at historical lows. There’s really some great value in some of these offshore plays.

Jason Gould: Yeah, and that’s one of the things that [inaudible 00:42:45]. Like to go through and restructure companies, because their balance sheet’s cleaned up, and they’re totally off everyone’s radar, and they’ve lost sell side interesting because the prices are so low. There’s definitely value out there. You may have to wait a couple of years for it to materialize, but when those types of situations re-rate, they re-rate meaningfully. You’ll have to be patient, but I think, ultimately, it’s inevitable, just because of the amount of oil that we need to produce over the next five to 10 years is going to be materially higher, and not all of that production will come from shale.

Mike Alkin: Yeah. One of the areas I think that you’ve had an interest in, and another friend of mine, who’s a very deep value investor, devotes a lot of his time, and it’s one that I don’t do anything in, but I know that you guys have liked the valuations on some of these biotech companies, which is kind of funny when you talk about liking valuations as a value investor in biotech, but I guess we’re at that point now.

Jason Gould: Yeah, especially … it’s a little less so now, but coming into this year, and then biotech companies are notorious cash burners, so you have to be that careful with [crosstalk 00:44:09] cash.

Mike Alkin: They’re like mining companies.

Jason Gould: Because you kind of know what the cash burn rate is, so it makes sense for some of them to trade below cash. But yeah, the percentage coming into this year, even larger biotechs, when you look at the indexes, I mean, the valuation using cash percentage, or trading for less [inaudible 00:44:32] cash on the balance sheet, where we’re kind of at panicked, 2009-type lows, and so I think it’s a really tricky business, but in terms of … Compare it to Tesla, for example. I mean, you’re buying a pipe dream that is more than likely not going to come true, whereas even doing a little bit of cursory reading … there is no such thing as cursory reading, necessarily, when you start digging into some of this biotech stuff, but just understanding what some of these companies and what some of these technologies can do, particularly gene editing, and just being able to create chemicals that have been created in the same way forever using different feedstocks, and actually being able to program chemicals, for example.

There’s a lot of innovation, a lot of things that are going to come out of that industry in the future, but picking individual companies is really, really tough in that space. I’m sure you know, and unless you have the kind of expertise to read all the studies, and understand the particular field that they’re in, it’s really, really tough to get an edge without having that kind of expertise. That was kind of our thought process, is we’re buying an index of these companies, but historically cheap valuations, based on that one metric, and we think that the promise of the innovation is a much more tangible and realistic future. That’s outperformed this year, so …

Mike Alkin: Before we talk about uranium and some stuff you don’t like … you like uranium, but then we’ll talk about maybe some other stuff on the short side that you don’t like, but let’s stop here for a second and talk about … Here you are. You’re a generalist investor. You come across the biotech stocks that are trading well below cash, at historical levels. We just got done talking about offshore oil and gas and the valuations there. For listeners who can learn about how an analyst goes through their investment process, and lord knows I talk about it enough on here, but talk about how you generate these ideas. What are you looking for? Walk us through your methodology and your thought process, so the germination of an idea to, “Hey, wow, you know what, I want to express my view here,” when you’re looking at these blowing up industries.

Jason Gould: Sure. I’ll start with a plug for Twitter. I think information’s increasingly becoming democratized, and so having a $24 thousand a year Bloomberg Terminal is not the edge that it used to be. Pretty much all … I don’t want to say all, but all of the data that gets aggregated in a Bloomberg Terminal can be found just on the internet, and so finding ways to aggregate and source idea, and then you have access to all the data you need, if you want to do the due diligence yourself. It’s all right there, and I think, for me, over the last few years, I’ve started to use Twitter a lot more, and in terms of sourcing ideas, if you can curate a list of … I found three or four guys that you can kind of tell do the work in oil and gas, and you can hear both sides of the argument, and you can watch conversations take place between people that really know what they’re talking about, and that’s something that you just, in my experience, unless you were on an energy desk or working in an energy hedge fund, you would never have access to those kind of conversations.

I think Twitter’s an invaluable tool. If you understand how to curate your follower list, and understand how to … you have to have a good bullshit filter, and be able to tell who knows what they’re talking about, and tell what to listen to, and that’s not an easy skill, necessarily, to acquire, but one of my [inaudible 00:48:55] my boss [inaudible 00:48:56], because he’s not on Twitter, but he knows I’m on Twitter, but I always tell him, if you want to know what a product’s worth, ask yourself how much the company would have to pay you never to use their product again. I tell them, for $100, I would delete my Facebook account in a heartbeat, but it’s hard for me to put a price on what someone would have to pay me to never use Twitter again, for example.

Mike Alkin: Yeah.

Jason Gould: There’s tools out there that don’t cost anything, miraculously, that are available to anyone, as long as they’re willing to put in the work and use it properly. Like I said, we’re in the age where information is democratized, and data is democratized, to a large extent, and so it’s out there if you’re willing to look for it. You’ve just got to be curious and have a good BS detector. [crosstalk 00:49:49].

Mike Alkin: Twitter is fascinating. Yeah.

Jason Gould: Huh?

Mike Alkin: No, I was going to say, Twitter is fascinating, and as an investor, as a professional investor, you know what you’re looking for, I know what I’m looking for, and you can tell in 10 seconds if someone’s full of shit or not if they don’t know what they’re talking about, in terms of just the language they use, just the way they present something. But, for me, I mean, I’ve never seen anything like the research I’ve seen on Tesla on Twitter, and the interesting thing is some of these guys come from all walks of life, but it’s that mosaic of information you could put together that’s really, really interesting. But yeah, I agree it’s a great idea generator. Once you get the idea, then how do you … like biotech, or uranium, or … What’s your process, then, after that? How do you start digging down, and saying, “You know what? I think there’s some value here.”

Jason Gould: Yeah, so let’s use uranium, for example, because I came at it from kind of a different perspective, and I started seeing … I read a lot of research on just commodities in general, and it started to line up with my macro view of where I think the world is heading, so just to sum up, I think, where the yield curve is, I think there’s a high chance that we’re going to be in recession the next year or two, and I think the one thing that could potentially extend it and kind of keep us from having a recession over the next one to two years is if the dollar goes down by quite a bit. That’s why I started out a year ago, starting to look at this, and where in the commodity space could I find the best risk/reward, where the fundamentals lined up, so even if it doesn’t necessarily work out, I’m still comfortable being along these things that I feel like have value or have less downside versus their upside.

But if both fundamentals and the macro story lines up, then you’re set up to have some really spectacular performance. That’s kind of how I started looking at uranium, even. Listening to your podcast is … it lined up with … I wanted to be in long things that were going to do well if the dollar sold off, and I wanted to have the best risk/reward setup in the event that that didn’t happen. That led me to some bombed out energy names. It led me to uranium names, and uranium’s got a few idiosyncrasies, like the Section 232, and it’s a complicated story, and it’s kind of cliché, but when you’re buying things that are down 95 [inaudible 00:52:51] balance sheet, down 95%, and have [inaudible 00:52:55] balance sheet, you kind of know what your burn rate is, and then you have a defined risk, I would say.

Mike Alkin: Yeah.

Jason Gould: Similar to some of these oil and gas names that were just bombed out. Yeah, that’s how I came at the uranium story. It’s really a broader commodity story. What part of the commodity spectrum did I want to be on that had the best risk/reward?

Mike Alkin: That’s great, and so I know one of the other areas I think you’ve done some work on that you think is interesting is the senior living and healthcare facilities market, which is … I mean, you’ve certainly got demographic tailwinds behind you.

Jason Gould: Yeah. You have the demographic tailwinds, but I think a lot of people are three or four years ahead of schedule on this piece. The supply growth has already kind of come into the market, and then it’s kind of just … I don’t think they necessarily were aware of the baby bust phenomenon before the baby boom, and so, in the last three or four years, actually, the age demographic that typically starts using senior living actually declined pretty dramatically for three or four years, and there’s been a lot of distress. There’s a lot of bankruptcies in the senior living space right now.

It is a pretty unloved sector, for maybe the right reasons, maybe the wrong reasons, but I think some of the people just got the timing right, and so, when you compare … in terms of commercial real estate, when you look at cap rates across the spectrum, you have apartments that are trading at five and six cap rates, and you have just normal, single family home rentals that are trading 5% cap rates, and all of a sudden you’ve got these senior living facilities that are trading at eight, nine, 10% cap rates.

Mike Alkin: I’m going to interrupt you for a second. Folks, when he’s talking cap rates, if you don’t know real estate, from a and investor standpoint, the way I think of it, when he means a 5% cap rate, the way I equate that, it’s trading at 20 times earnings. It’s the inverse, and when you’re talking about a 10% cap rate, that’s like 10 times earnings, right? Just as a little rule of thumb [inaudible 00:55:26] type thing, just to give you a little bit of sense. Anyway, I’m sorry. You can go ahead.

Jason Gould: Yeah, sorry. Yeah, it kind of goes back to, if you think inflation might [inaudible 00:55:37] or if you think the dollar might be weak, real estate’s probably a good place to be, but, again, in this situation, I’d rather be buying towards the cheaper end of the spectrum, especially when I feel like the fundamentals are starting to turn in a way that, in two or three years, even if my macro view doesn’t work, that the sector is going to re-rate, just because of those fundamentals.

Mike Alkin: You know, it’s-

Jason Gould: That’s kind of my thesis.

Mike Alkin: No, it’s interesting. It’s funny, right? Again, here we are. We’re talking supply/demand, and for me, everything is cyclical, and obviously not a secular growth rate, high-flying software company, but so many industries are cyclical, and it comes down to basic understanding, supply/demand 101, and you don’t have to be an expert on the given commodity or the given industry, but you just need to understand what the drivers of those from a supply/demand standpoint, and, my gosh, it presents so many opportunities because of recency bias. At the top, people think it’s never going to end because of the recent experience, and the same thing on the bottom, and it sounds like you follow that kind of investing philosophy. I don’t want to put words in your mouth, but it sounds like that you’re looking for that. Yeah.

Jason Gould: No, that’s accurate. Yeah, I mean, my undergrad was in economics, and my first deep dive readings into the industry were more on the macro side, and so I was a little later to the accounting and financial side of the business, but … not to sound cliché, but supply and demand’s still pretty important as a driver. I was just skimming over David Einhorn’s book, Fooling Some of the People All of the Time, this last weekend, and something he said in the intro made a ton of sense. If you don’t understand the economics of the business, it doesn’t matter how the … if you’re making an investment, the underlying economics ultimately win the day.

Mike Alkin: Yeah.

Jason Gould: The accounting can kind of tell you or give you clues on whether that’s happening or not, or happening in a way that you don’t expect, but at the end of the day, good unit economics is what makes great businesses.

Mike Alkin: Tell us about Lifetime, and your business, and how you grow the business, and what’s your day-to-day, and what’s the future of Lifetime, and where do you take it?

Jason Gould: Sure. We’re still a fairly small operation. Our main principal is Jason Potts, and he’s built the business, and we have both Lifetime Wealth Management, and we also have Lifetime Insurance and Lifetime Tax Advisers. I think the next stage of growth is to bring in other advisers who have the same values and same morals that we do. We’re not a growth at any cost. We want to maintain the culture and just kind of the lifestyle that we’ve built here.

We don’t want to dilute the brand, and so that’s kind of our next growth avenue, and then also we’ve got the … there’s kind of a limit to how many clients any individual can handle, and so the next aspect of growth for Jason … some of our clients are getting a little older, and they’re going through the life cycle of a normal financial advising relationship, but we’re moving into more of a family office environment, where we can take a client that maybe has $100 million of assets, and maybe it doesn’t make sense for them to have their own family office, but we can provide some of the services that a family office would offer, at a better value than hiring a full staff of accountants or a full staff of portfolio managers, and play that quarterback role, both from the portfolio management side, but also the tax [inaudible 01:00:04] insurance side. That’s kind of where we are as a business.

Mike Alkin: For those who don’t know, explain what an RIA is, and the differences between the people that they talk to that can potentially help. What’s the role of an RIA versus someone who’s working at a Bulge Bracket firm that’s going to try and help them? What are the nuances and the differences?

Jason Gould: Yeah, I mean, RIAs … or sometimes call them independent financial advisers. They’re not locked into any structures and things that are more common with a Merrill or a Edward Jones, and they can offer any investment product. I think [inaudible 01:00:54] the Bulge Bracket also now, so in terms of really trying to match clients with the best product and service that meets their needs across really the entire panoply of investment options is something that has historically been more frowned upon than an Edward Jones or a Merrill, who would oftentimes put their clients in their own funds, and so they would take a management on the internal fund, and then they would take a management fee on the advising relationship, and so, for them, that’s a really lucrative model, but it doesn’t work out great for the clients, ethically. It’s really just a way to cut out a layer of expenses, the [crosstalk 01:01:43] being that you can provide better service.

Mike Alkin: How much of the portfolios that you oversee or the clients, how much is from your own individual stock-picking versus how much you allocate out to other managers, or to ETFs or mutual funds? How do you guys manage that balance?

Jason Gould: I manage about 40% of our assets, in the normal … I wouldn’t say a hedge fund-like structure, but it is more active. It’s a very diverse portfolio, but it’s more catalyst driven, so it’s something that you would see more in a hedge fund-type environment. Then the rest is passive. We have a number of core models and [inaudible 01:02:32] models, but they have very low expenses, and it’s kind of a combination of just a global asset allocation and a risk parity-type framework, where you’re extending the duration of some of the fixed income portfolio, and really just trying to get that exposure for as cheap as possible. But yeah, that’s kind of the setup right now. It’s about 60% passive and 40% active.

Mike Alkin: Great, so your day-to-day is managing the portfolios, looking for longs, and do you short outright or do you express the view through puts?

Jason Gould: No. We have the capability to, but, typically, I just like defining the risk, and it’s tough for especially … I would rather [inaudible 01:03:18] put option than be short.

Mike Alkin: Yeah.

Jason Gould: Just because, A, I know what my risk is [inaudible 01:03:25]. I think anyone that’s short has the … I think it’s Volkswagen scenario in the back of their mind, and it doesn’t matter. Even if it’s a 2% position, I mean, if you go through something like that, it leaves scars, and I didn’t personally go through it, but I can imagine being in a situation where you have a 2% position that’s all of a sudden a 10% position.

Mike Alkin: Yeah. Yeah, not the kind you want.

Jason Gould: Yeah, so in terms of, again, go back to risk/reward, I think just willing to take some time decay in exchange for not having to worry about that scenario on the short side, and then on the long side, it’s really just pretty diverse. It’s try not to have too much exposure to any one thing, but also let things run. I’m fine with taking gains and letting things run. Yeah. It’s a little bit of … I wouldn’t say art, but it’s set up to where you at all times know what your risk is, and you’re managing your exposures to all your things.

Mike Alkin: What would you say … I keep a list right at my desk, lessons learned, things to look for. I mean, as you think back through your career, and being a hedge fund analyst, being a portfolio manager, I mean, what are some of the things that, if you were talking to your younger self, that you would say, “Here are the things that you really need to be aware of when you’re managing an equity portfolio.”?

Jason Gould: I think, from the analyst side, it’s take some hard lessons learn, but trusting numbers over people. Numbers lie a lot less than people do, and so-

Mike Alkin: Absolutely. Do you know what’s on my desk, by the way, Jason? I have sitting on my desk.

Jason Gould: What’s that?

Mike Alkin: I have sitting on my desk a sign that says … it’s taped to one of my monitors, that says trust the math, ignore the narrative. That’s [crosstalk 01:05:48].

Jason Gould: Exactly.

Mike Alkin: Yeah.

Jason Gould: But that’s one of the things you kind of learn the [inaudible 01:05:53] a lot of times, because I think most people are inclined to believe the people that are … especially if they’re in any kind of positions of power. If you’re speaking to the CEO, you have a tendency to just believe what they’re saying, and I’ve just found, over time, that looking at the numbers, and reading the actual reports, and going through the 10-Ks and 10 keys first, and then having your own view of what the data is telling you, and then listen for the BS coming from management, rather than the other way around. Yeah, I think that would be one.

I would say the other thing is just to [inaudible 01:06:39] done a good job, but you’re never done making mistakes in this business, and just do your best not to make the same mistake again. Learn from your mistakes, I think. I’m a firm believer the strongest way of learning in this business is … I think [inaudible 01:07:03] says the greatest teacher is the stick, or something like that.

Mike Alkin: Yeah, yeah.

Jason Gould: The pain that you experience from taking losses is extremely valuable if you use it as such, rather than …

Mike Alkin: Yeah, absolutely.

Jason Gould: You don’t create a pity party, you learn from it, and get better, and the greats are great because they’ve made all their mistakes. They’ve got them out of the way, and I think there’s no other shortcuts around making those mistakes. You’ve just got to learn from them and move on. I think that would be kind of a word of encouragement.

Mike Alkin: I had a boss early on who, every time one of my stocks would do something stupid, meaning I was stupid, I got something wrong, he would say, “Write me a postmortem, and just take me back. I don’t care how long it is, and just, as you’re writing it out, you’re going to see what you missed and where you could have done things differently,” and it’s really, really valuable to do that, and God knows my list is long. [inaudible 01:08:07].

Jason Gould: Yeah, you’re never really done making mistakes. You just make fewer of them.

Mike Alkin: Exactly.

Jason Gould: You get in a situation where you say, “Wait, I’ve made that mistake before. I’m not going to do that again.” You become a better investor over time by doing that.

Mike Alkin: Absolutely. Absolutely. Well, this has been great. I enjoyed speaking with you. Anything that you wanted to talk about that maybe I didn’t bring up?

Jason Gould: No. I mean, I was hoping to talk about uranium, but …

Mike Alkin: Go ahead. Let’s go. Go, go. We’re on no time limit, so kick it around. What’s your uranium thesis?

Jason Gould: You’re the expert. I feel like I get to learn way more talking to you. I’ve listened to the, I think, the March 12 podcast that you did with Brandon and Malcolm. It may be one of the best that I’ve heard, in terms of just summarizing all of the angles of your thesis. But yeah, I think it’s an amazing setup, and I think it’s … Maybe I’m overselling it a little bit, but I don’t think people really understand how unique of a situation this is, because, typically, industries are not this small, to where if something like this happens, hedge funds and institutions will just come in and take positions, and they can’t really do that here, and so I don’t think a lot of … or maybe a lot of your listeners don’t necessarily appreciate how unique of a situation it is, where you can’t have people come in and take positions in a sub-hundred million dollar companies. They can’t do it, and so it’s almost like the industry is going to have to double or triple before institutions can even get involved.

Mike Alkin: Yeah.

Jason Gould: It’s truly unique, I think, from that perspective. Probably one of the things that makes me most excited about the position is how few players are even involved. I mean, you’re talking about 40 to 50 companies in the world, down from … call it 500 [inaudible 01:10:28] less than 10 that I know of [inaudible 01:10:29]. I don’t think it registers how small that is to a lot of your listeners who are just watching the stock price on any given company tick up or tick down every day, but I think it’s a unique situation. That’s really all I wanted to say on that. You know it way better than I do, but …

Mike Alkin: No, you know, it is. I said when I decided to start talking publicly about it, it took a while because I kept saying to myself, “I got to be missing something.” I mean, this is asymmetry I’ve never seen before. This is crazy. But when something’s left for dead, people just forget about it, so … Anyway, and yeah, no, that’s great. You get up to New York much? You travel much, or is it mostly [crosstalk 01:11:27].

Jason Gould: Not really. I’m mostly just a Texas boy. Stay around here, where I’m comfortable, but every once in a while I get up there. Not too often anymore, but I know you’ve got some roots in Dallas, so if you’re ever in Dallas, why don’t you grab a beer?

Mike Alkin: Absolutely. My wife and I lived there for a while, and we loved it. We still have good friends, and it’s just a great, great, great city. Yes, I really enjoyed it. Well, great, man. I really appreciate your time. It was great visiting with you, and we’ll have you back on here.

Jason Gould: Happy to do it. Thanks, Mike.

Mike Alkin: Thanks, man. Take care.

I hope you enjoyed listening to my chat with Jason. Smart dude. Really like the way he thinks. Very, very solid thinker with respect to individual positions, with respect to industries, with respect to how to formulate his opinion, and sharp guy. I mean, like I said before in the introduction, is you don’t always want to have like-minded people on, but his approach and methodology is very similar to the way I approach the markets, and not that I’m always right, I’m certainly not, but having a method and having a process is really important, and I think Jason really has that down well. Glad you got to spend time listening to his views on the world, and some industries and some companies.

Next week is Memorial Day, and I am not going to do a podcast. Actually, my wife and children are going with some other family, some other moms, and daughters and sons. They’re going to an amusement park, and I am going to stick around the house and do some work around the home. A couple of things I wanted to get done, and so it’s a moms and kids weekend, and I’m around here for a few days, and I’ve got some stuff to do, but I’m going to drink a beer and watch some games, and over the Memorial Day weekend, I am not going to do a podcast. That’s okay. You don’t need to hear me every week. Lord knows I get tiring, listening to me, so we’ll be back the week after Memorial Day. Until then, hope you have a great holiday if you’re in the US. If not, just hope you have a great week, and see you in a couple weeks. Thanks.

Announcer: The information presented on Talking Stocks Over Beer is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.


Editor’s note: Mike and Frank are big believers in boots-on-the-ground, investigative research for their subscribers. Recently, Frank flew to New York City to try out a futuristic weapon police departments around the world are testing. If you haven’t heard about this technology, watch it action here. It’s a device Frank wants every investor to know about—before it goes mainstream.

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