Other[Music][Music][Music]it's a great privilege obviously to have it's a great privilege obviously to have it's a great privilege obviously to have Manish Manish Manish um back on some zero uh monish you're uh um back on some zero uh monish you're uh um back on some zero uh monish you're uh you're a bit of a valley investing Legend Legend Legend um you've got guy Speer here who's um you've got guy Speer here who's um you've got guy Speer here who's himself very well known in the community himself very well known in the community himself very well known in the community uh uh kind of itching to hear what uh uh kind of itching to hear what uh uh kind of itching to hear what you've got to say you've got to say you've got to say um in the past we've chatted um in the past we've chatted um in the past we've chatted um uh I guess this was like last summer um uh I guess this was like last summer um uh I guess this was like last summer I forget exactly where we kind of went I forget exactly where we kind of went I forget exactly where we kind of went through a whole bunch of through a whole bunch of through a whole bunch of um sort of different themes um big big um sort of different themes um big big um sort of different themes um big big Tech being one of them Tech being one of them Tech being one of them um turkey being another one um turkey being another one um turkey being another one um and and so I guess we can start with um and and so I guess we can start with um and and so I guess we can start with turkey turkey turkey um obviously super tragic what's going um obviously super tragic what's going um obviously super tragic what's going on there right now on there right now on there right now um it seems like every time I I open up um it seems like every time I I open up um it seems like every time I I open up a web browser I see like at the death a web browser I see like at the death a web browser I see like at the death toll Rise by a few thousand it's it's um toll Rise by a few thousand it's it's um toll Rise by a few thousand it's it's um yeah it's just kind of hard to believe yeah it's just kind of hard to believe yeah it's just kind of hard to believe but um you've been uh an investor in but um you've been uh an investor in but um you've been uh an investor in Turkey you've been to Turkey you've Turkey you've been to Turkey you've
QuestionerTurkey you've been to Turkey you've visited it um I'm assuming you've spent a decent amount of time there by this point um you know maybe just just first off like before we even get into race us um uh do you have any just sort of Reflections on what's what's going on there recently if you have any thoughts feel free to to sort of um share them with us
Questioneryeah it's it's very tragic I think I think the death toll numbers and one thing that disappointed me in the media is that we keep seeing the death toll rise but what they don't report the number that I'm missing and the number that I'm missing will unfortunately eventually approximate the actual death toll we are going to see some Miracles and I hope we see a lot of Miracles but it's been more than three days and so as the time goes by and the missing my friends in Turkey tell me could be as much as a hundred thousand
Questionercould be as much as a hundred thousand and so it's a very large number of what I would but I would just say is that some zero has been very generous to dakshana I would say that anything you're planning to do this year production now you should redirect to Turkey to the relief efforts and if it comes to us then we'll redirect it anyway and also the same to your viewers I think to the extent that they are thinking about turkey I would say think about the relief efforts and such and any way we can help because it's a serious human tragedy and I don't think the scale is known yet but it's really bad yeah
OtherI think I I think that makes a ton of sense um and we'll we'll certainly follow up with you on that um so um I think that the Turkish market they close the market until the 14th because it was so in Turkey basically stocks can go up or down at most 10 percent a day
Othergo up or down at most 10 percent a day and for a couple of days they hit the 10 lower limit it didn't really matter which stock it was I think almost the whole Market was hitting the lower circuit even though a lot of the companies are not directly affected or may not be that affected by the tragedy and I think The Regulators felt they'd give it some time for people to not do Panic selling or whatever else but when the Market opens up on the 14th the prices are likely to be more attractive than they were a few weeks ago
Questioneryeah well it's it's a good um it's a good thing we have we have guy on the on the call here one of the questions that um uh one of the listeners had for guy which is sort of a philosophical one is you know uh you know how do you think about investing in certain you know getting comfortable investing in certain countries
Questionerinvesting in certain countries um and uh you know to the extent valuesum and uh you know to the extent valuesum and uh you know to the extent values may be different from the West whatevermay be different from the West whatevermay be different from the West whatever uh you know people have lots ofuh you know people have lots ofuh you know people have lots of different views on thisdifferent views on thisdifferent views on this um you know guy had at least previouslyum you know guy had at least previouslyum you know guy had at least previously sort of passed on Race us even though wesort of passed on Race us even though wesort of passed on Race us even though we knew you you were invested in itknew you you were invested in itknew you you were invested in it just because you know he wasn't asjust because you know he wasn't asjust because you know he wasn't as comfortable with with the the region thecomfortable with with the the region thecomfortable with with the the region the jurisdictionjurisdictionjurisdiction um governance things like thatum governance things like thatum governance things like that um so just taking a step back I I meanum so just taking a step back I I meanum so just taking a step back I I mean we've talked about race us before aswe've talked about race us before aswe've talked about race us before as being just you know the way you describebeing just you know the way you describebeing just you know the way you describe it is sort of an unbelievable value butit is sort of an unbelievable value butit is sort of an unbelievable value but um how did you personally just kind ofum how did you personally just kind ofum how did you personally just kind of get comfortable with turkey as a as aget comfortable with turkey as a as aget comfortable with turkey as a as a market uh what was it that kind ofmarket uh what was it that kind ofmarket uh what was it that kind of helped you get overhelped you get overhelped you get over that hurdle
Otheryeah I think in investingthat hurdle yeah I think in investingthat hurdle yeah I think in investing we're always going to be looking at awe're always going to be looking at awe're always going to be looking at a number of different factors around annumber of different factors around annumber of different factors around an investment and one of the difficultiesinvestment and one of the difficultiesinvestment and one of the difficulties that comes up in investing is what
Questionerthat comes up in investing is what weight we give to those factors and how we think about them so if I go back if I go back to 46 years ago 77 so 1977
QuestionerCharlie Munger got a phone call from a friendly broker offering him 300 shares of a company called Bell Ridge oil which was a large oil field in Bakersfield California for a hundred and fifteen dollars a share and Charlie said I'll take it it was a very thinly traded pink sheet stock and that was about 35 000 and he made that investment and Charlie knew from what he knew about Belgrade that it was probably trading at you 10 15 percent of liquidation value it was really cheap and two days later the broker called again and said that he had another 1200 shares at the same price and this time Charlie didn't have the cash and so he would have to either sell something or borrow the money or
Questionersomething or borrow the money or something so he told the broker I'll call you back and then he thought about it and he decided to take a pass on those second 1200 shares so the first 300 shares belridge had a market cap of about 115 million in 1977 and two years later 79 Shell Oil bought the company for 3.6 billion it was about a 30X plus the very fat dividend uh that he collected for a couple of years and so his 35 000 became about a million dollars in 79 which he then proceeded to put into Berkshire at approximately 300 a share which is now close to 500 000 dollars a share that's about a 1500 X and and the million today is about a billion and a half and so the 35 000 became about a billion and a half it's about a 45 000 X over that period now Charlie says Battle Ridge was his biggest mistake because the 1200 shares that he chose not to buy that he knew were worth at
Questionernot to buy that he knew were worth at least five or ten times what they were being offered at would have given him about another 4 million in proceeds and that would have converted in about 6 billion and Counting into Berkshire shares and he said that the CEO of bellridge was a bit of an alcoholic and and so he said that he knew the oil field was spectacular actually this was an oil field that actually they owned all the rights which is very unusual they owned it into perpetuity just to give you a sense of what happened with shell from 79 till today gel has pumped out and collected more than 60 billion dollars from that oil field since 79 buying it and it's still pumping it is still producing oil for them so it's a very prolific field and Charlie knew that so he said he when he reflected on belridge he said the oil
Questionerhe reflected on belridge he said the oil field didn't drink okay he said it was the CEO who drew drunk and he needed to what he didn't separate was the oil field from the CEO right and so basically he said I overrated the CEO's alcoholism and I underrated the just the basic economics of the field which you couldn't really screw up whether the guy running it at the time was alcoholic or not and so when we look at Turkey obviously you're going to see macro issues you're going to see very high inflation you're going to see monetary policies that don't make sense you have all these things going on I'd have kind of high level over the country but then when you look at individual businesses let's erase us aside for a second and let's talk about the Coke bottler in Turkey because that's a business that everyone will be more familiar with I think you can understand
Questionerfamiliar with I think you can understand what the bottling business looks like around the world it's very similar so race a coke bottle in turkey has an exclusive right to sell all Coke products in Turkey not only in Turkey they're in 12 other countries including Pakistan so they do all the coke bottling and sales in Pakistan they own 49 of the Pakistani Coke bottle and the Coca-Cola Company in Atlanta owns 51 which they probably in the next few years will sell to the Turkish company and Coke sits on the board of the Coca-Cola bottler in Turkey it's Coca-Cola Isaac so coke owns 20 of that business and they sit on the board of that of that company and and basically when Coke has bottlers that come up in the region for example they had one and I forget I think it was Turkmenistan one of those Central Asian countries where the government was the bottler wasn't doing
Questionergovernment was the bottler wasn't doing that great and basically what Coke did is they arranged a sale to the Turkish company and and they even subsidize the sale for them so they are a so I would say that when we look at the coke bottle in Turkey and you look at another Coke bottler in Europe or in somewhere in the US or Latin America they are very similar businesses they have very similar economics and unless turkey did something strange put Capital controls or something else these businesses should be valued very similarly but they are not so the coke bottle basically trades at barely hitting double-digit multiples now and it used to be less than half the price a year ago trading at four or five times cash flow and so when we look at businesses and places like turkey and I met the I met them twice actually the Coca-Cola bottler
Todd Combstwice actually the Coca-Cola bottler Company in turkey and there's a video I had done a few years back talk at UC Irvine it's about two hours just on the coke business model and I asked them to look at that video which they did and when I met them the second time they didn't really want to talk to me about the you know the merits of investing in that company they really wanted to pick my brain on the strategy they should adopt which was fun so they were actually asking me a bunch of questions about your different folks in the road and what they should do and so on so forth which is good but that business has owned the promoter of the business in Turkey is one of the highest quality families and management teams in Turkey they have two other listed businesses they have a beer business which have 50 market share and they're very dominant Supermarket all three businesses are
QuestionerSupermarket all three businesses are very high quality the people that I met running these businesses were the highest quality management team of any team I met in Turkey they were exceptional some of them had ivy league educations in the US the CFO of the coke bottler used to work in Atlanta for the Coca-Cola Company he then worked in Delhi for the Pepsi bottler he'd been all over the place he's actually a Ukrainian he's not Turkish so I found with that particular company a great management team I found a monopoly business you know or a duopoly business you could say in terms of the dominance of the brand and then you have the overlay of turkey so I think that when you the investor look at these things it's important that you weigh the factors correctly and there is some weight that you should give to the fact that it's in Turkey but to say that I'm
Questionerthat it's in Turkey but to say that I'm gonna reject it because it's in Turkey is like Monger saying the CEO drinks too much so I think this is one of the things about investing is that we don't usually get pure pristine pets that we can make there's always some hair on them there's if we talked actually time flies but the last time we spoke was about a year ago and it seems like it was shorter but when we spoke what Meta Even a business matter there are very great aspects to the business and there are some not so great aspects to the business and you have to weigh those factors and we don't we won't always get it right but the more rational we are in looking at those factors probably the better decision we end up making yeah monish the interesting thing about you is that you're known for um taking pretty concentrated bats and uh you're also known for holding on to
Questioneruh you're also known for holding on to positions without any kind of like um positions without any kind of like um positions without any kind of like um Hardline or bright line cap in terms of you know a lot of times people are oh you know a lot of times people are oh you know a lot of times people are oh well this Stock's now 10 of my portfolio well this Stock's now 10 of my portfolio well this Stock's now 10 of my portfolio I better sell it so it's back down to I better sell it so it's back down to I better sell it so it's back down to five percent like as far as I understand five percent like as far as I understand five percent like as far as I understand you're not of that school of thought so you're not of that school of thought so you're not of that school of thought so um when you were looking at Ray sauce um when you were looking at Ray sauce um when you were looking at Ray sauce from a waiting standpoint and trying to from a waiting standpoint and trying to from a waiting standpoint and trying to uh uh uh uh you know handicap it for the fact uh you know handicap it for the fact uh you know handicap it for the fact that it is in Turkey how did that affect that it is in Turkey how did that affect that it is in Turkey how did that affect your position size your position size your position size
Ted Weschlerwell the the problem I had with Asos was well the the problem I had with Asos was well the the problem I had with Asos was that when I the day I've met them for that when I the day I've met them for that when I the day I've met them for the first time the market cap was 16 the first time the market cap was 16 the first time the market cap was 16 million so no matter what I tried to do million so no matter what I tried to do million so no matter what I tried to do at that time we were managing around 700 at that time we were managing around 700 at that time we were managing around 700 million and I ended up by the time I million and I ended up by the time I million and I ended up by the time I finished buying the position I ended up finished buying the position I ended up finished buying the position I ended up owning about a third of the business for owning about a third of the business for owning about a third of the business for seven million that we invested seven or seven million that we invested seven or
Questionerseven million that we invested seven or eight million and so I didn't want to eight million and so I didn't want to eight million and so I didn't want to make it a one percent bet I ideally like make it a one percent bet I ideally like make it a one percent bet I ideally like to make 10 bets but there just wasn't a to make 10 bets but there just wasn't a to make 10 bets but there just wasn't a opportunity yeah 20 million dollar opportunity yeah 20 million dollar opportunity yeah 20 million dollar position to put 70 million into it I position to put 70 million into it I position to put 70 million into it I couldn't do that and now raise us since couldn't do that and now raise us since couldn't do that and now raise us since then now the the earthquake it's dropped then now the the earthquake it's dropped then now the the earthquake it's dropped a little bit but a little bit but a little bit but it's hovering around 250 300 million now it's hovering around 250 300 million now it's hovering around 250 300 million now so it's moved up a bit but their so it's moved up a bit but their so it's moved up a bit but their liquidation value which used to be about liquidation value which used to be about liquidation value which used to be about six or seven hundred million when I was six or seven hundred million when I was six or seven hundred million when I was making the investment is probably north making the investment is probably north making the investment is probably north of one and a half billion now so that's of one and a half billion now so that's of one and a half billion now so that's also moved up quite a bit it's no longer also moved up quite a bit it's no longer also moved up quite a bit it's no longer at two percent of liquidation value it's at two percent of liquidation value it's at two percent of liquidation value it's probably more like maybe 20 25 percent probably more like maybe 20 25 percent probably more like maybe 20 25 percent of liquidation value something like that of liquidation value something like that of liquidation value something like that and it's not the liquidation value that and it's not the liquidation value that and it's not the liquidation value that really interested me what interested me really interested me what interested me really interested me what interested me was that this was a company that was was that this was a company that was was that this was a company that was extremely smart about reinvestment a
Todd Combsextremely smart about reinvestment a father-son team that run the business they really don't want to make investments if they're not getting the money back in dollars in two or three years and so their reinvestment hurdles are 25 to 35 percent irrs and and they're very creative they've entered a number of businesses in the past which they weren't in they start small get competence and so they have moved into a number of different businesses and they've gotten scale in those businesses I didn't even value all those other businesses because those were harder to Value all the numbers I gave you it's just for their one real estate business and so if a business is reinvesting at very high rates and the leadership is relatively young my take on Race us was that we're going to let this ride for about 20 years so it might be 10 20 billion 30 billion who knows what it is
Ted Weschlerbillion 30 billion who knows what it is in 2040 or 43 just leave it alone now if I look at my funds in one of my funds of the offshore fund there are two bets in Turkey that collectively made up about half the fund not because we put half into it and one was resource which went up and the other was tab airports which is another great business and we for the most part closed the fund to new money coming in and I told my investors look it's very concentrated we're not going to lighten up because we when we look at what we own they're very cheap and very good assets and even if it gets to 80 percent in these two stocks we don't plan to lighten up so I told them that if they don't like that approach that I'm taking they can get off the bus and they can redeem and move on but I'm not going to change my perspective on that so the way I look at it is that if
Questionerthat so the way I look at it is that if you look at the Walton family and the ownership in Walmart Sam Waltons passed away a very long time ago and no Waltons are really running that business there's only one Walton on the board they don't have control of Walmart most of them have kept the stake and for most of the Waltons the Walmart stake represents vast majority of their wealth probably in many cases more than 90 percent so you would say that's not Diversified but if you talk to them they would say it's perfectly fine they're very comfortable with that so the way I look at Racers is we are not the founder or the promoter or the owner of the business but we can think of it like that and or if we own the Coca-Cola company is bottler in Turkey we should think of ourselves like a minority owner and if we were a minority owner of a
Warrenand if we were a minority owner of a high quality business like that we shouldn't even sell it if it gets fully priced we should you not even sell it when it gets overpriced we should sell it when it's egregiously overpriced if Walmart went to something like 100 times normalized trailing earnings yeah maybe the family should look at selling but at 40 times 30 times 20 times it's a good idea not to do anything just because you think the earnings will continue to compound and that multiple will compress over a longer time Horizon there are very few businesses in the universe of listed companies that would qualify as great business probably I would say less than five percent or three percent of listed companies would qualify as great businesses if you find yourself in the very happy situation of fractional ownership of one of those businesses hang on for dear life and my this is the
Questionerhang on for dear life and my this is the one of the biggest mistakes I've made over time guy owns a stake in Ferrari thanks to monish thank you monish for giving guys and monish doesn't own Ferrari and when I made the investment in Fierce Chrysler in 2012 when the market cap was 5 billion and their sales were 140 billion period Chrysler was trading at less than four percent of Revenue okay it was just just the equity was and 80 percent of Ferrari was inside that 6 billion and plus there was all the Jeeps and RAM and Maserati everything else in there and at that time obrai funds owned something like something Northern one percent of Ferrari when I looked through the Ferrari stake and we made a lot of money on the investment and one of the dumbest things I did was Ferrari looked optically expensive to me and and I sold and we would probably
Warrenand and I sold and we would probably have three times that amount of money if I just kept the position and like Charlie says all too soon and why is too late so one of the lessons I've learned the hard way is that very few businesses have the characteristics of Ferrari has the higher the price of the product the greater the demand they recently released their SUV which they don't even want to call an SUV it's going to start at 421 000 you're not going to get one for 421 000 by the time you option it out it's probably 600 000 or something and you can get one at six hundred thousand they all sold out and and so if you actually try to buy one from someone who's got one you were probably gonna spend over a million on that that's an incredible business
Questioneryeah 80 margins
WarrenI uh I uh I was a little annoyed by the the SUV but I I know they had to do it
Questionerum so um so um so um putting aside Ferrari for a second um
Questionerum putting aside Ferrari for a second umum putting aside Ferrari for a second um so do you still own a third of of raceosso do you still own a third of of raceosso do you still own a third of of raceos is that roughly kind of your stake atis that roughly kind of your stake atis that roughly kind of your stake at this pointthis pointthis point
WarrenI hope I go to my grave with itI hope I go to my grave with itI hope I go to my grave with it
Questioneryeah do you feel like as a as a largeyeah do you feel like as a as a largeyeah do you feel like as a as a large shareholder or minority shareholder umshareholder or minority shareholder umshareholder or minority shareholder um that uhthat uhthat uh you know you you have some say in termsyou know you you have some say in termsyou know you you have some say in terms of how uh you know again getting back toof how uh you know again getting back toof how uh you know again getting back to corporate governance I mean do they seecorporate governance I mean do they seecorporate governance I mean do they see you as a as sort of ayou as a as sort of ayou as a as sort of a an equal or closely close to equal yeahan equal or closely close to equal yeahan equal or closely close to equal yeah
WarrenI have a good I have a good relationshipI have a good I have a good relationshipI have a good I have a good relationship with the founders and in fact last yearwith the founders and in fact last yearwith the founders and in fact last year they came to Omaha for the Bookshopthey came to Omaha for the Bookshopthey came to Omaha for the Bookshop meeting the sun did which was excellentmeeting the sun did which was excellentmeeting the sun did which was excellent I thought that might help them in theirI thought that might help them in theirI thought that might help them in their journey to understand Berkshire more andjourney to understand Berkshire more andjourney to understand Berkshire more and Buffett says that if they need my helpBuffett says that if they need my helpBuffett says that if they need my help we're both in trouble basically I thinkwe're both in trouble basically I thinkwe're both in trouble basically I think that if I I don'tthat if I I don'tthat if I I don't I'm a lazy guy Divya I really don't wantI'm a lazy guy Divya I really don't wantI'm a lazy guy Divya I really don't want to serve on board I don't want to beto serve on board I don't want to be
Otherto serve on board I don't want to be telling company a management team at races can run circles around running that business better than I ever could and I don't think I could come up with any strategy that would be superior to what they are doing yeah and basically I think that business works because of the incentives the team has and so I am happy to be a cheerleader on the sidelines and I don't have any desire I haven't seen them do anything dumb in 15 years well I just see one one smart thing after another smarter than I would have done if I was running it yeah
Questionerwho's the broker that you use to build the position in the first place
Otherturkey is difficult to access you can access it if you have a prime broker relationship we use UBS but I think any of the major Prime Brokers would be able to get you access to Turkey for retail investors in the US
QuestionerTurkey for retail investors in the US there is only one way that I'm aware of to invest in Turkey which is true fidelity and so if you open an account at Fidelity or an IRA or whatever and you can't really trade it on their platform but you can call their International desk and place trades on the phone with them and they have its higher fees I think it's 80 or 90 dollars per trade and there's like a FX conversion fee and all of that so there's some frictional cost but it's still okay uh and speaking of FX um uh I think you mentioned this to me you mentioned this to me via email but um the Lira obviously has had a tough time over the last year or so um you don't as far as I understand it you're not hedging FX at all right you just no I think
Otherresource has gone from the 16 million to the 250 odd million in dollars over the last three and a half years I
Questionerover the last three and a half years I don't even know how much has gone up in Lira four times that and and the leader was five Lira to the dollar when I invested it's now approaching 19 Lira to the dollar so we've lost 75 of value in the Lira it was not relevant to me because I knew that the asset was automatically inflation index because a warehouse is steel iron concrete cement land all of these things are going to move with inflation and and so basically there's and their rents are inflation index as well and some other leases and dollars a Euro so basically there was really no reason and these are the only Investments I'm interested in Turkey so even when I look at the coke bottle they have the ability to raise prices to keep locked up at inflation so I don't expect inflation to have a big detrimental impact on their business there's no need to hedge the Lira if you
Questionerthere's no need to hedge the Lira if you are invested in a sliver of the companies in turkey that are unaffected by inflation what was the other Turkish name that you that your bullets have airports Tav and a tab is a another wonderful business they have 15 different airports in eight countries and the airport business is a fascinating business it's a complicated business actually because it's 10 businesses in one and but these are very favorable economics if you are very favorable economics if you don't overpay for the right to run the airport so typically with airports what happens is it's a bot model build operate transfer so you'll get a 25 30 50-year concession with some airport where you say okay I'll build a new terminal I'll do the XYZ I'll give the government half a billion dollars and against that I get the right to run the airport for 30 years or 50 years and there are portions of the revenue that
Questionerthere are portions of the revenue that are regulated like the passenger fees are regulated like the passenger fees are regulated like the passenger fees and all of that and there are portions and all of that and there are portions and all of that and there are portions of the revenue that are not regulated of the revenue that are not regulated of the revenue that are not regulated like duty free and food and beverage and like duty free and food and beverage and like duty free and food and beverage and that sort of thing so when you blend it that sort of thing so when you blend it that sort of thing so when you blend it all together and you look at the all together and you look at the all together and you look at the economics especially if you don't economics especially if you don't economics especially if you don't overpay for these things it's a monopoly overpay for these things it's a monopoly overpay for these things it's a monopoly asset it's a cash cows and in the case asset it's a cash cows and in the case asset it's a cash cows and in the case of Tav they have a very unusual of Tav they have a very unusual of Tav they have a very unusual situation they acquired one airport situation they acquired one airport situation they acquired one airport during the middle of the pandemic when during the middle of the pandemic when during the middle of the pandemic when air traffic was close to zero in Almaty air traffic was close to zero in Almaty air traffic was close to zero in Almaty in Kazakhstan almati is the largest city in Kazakhstan almati is the largest city in Kazakhstan almati is the largest city in Kazakhstan and that was an outright in Kazakhstan and that was an outright in Kazakhstan and that was an outright purchase it is the only airport I'm purchase it is the only airport I'm purchase it is the only airport I'm aware of in the world major airport aware of in the world major airport aware of in the world major airport that's privately owned forever so if that's privately owned forever so if that's privately owned forever so if this wasn't a 30-year 50-year concession this wasn't a 30-year 50-year concession this wasn't a 30-year 50-year concession it's a permanent concession they own it it's a permanent concession they own it it's a permanent concession they own it permanently and that's a very unusual permanently and that's a very unusual permanently and that's a very unusual situation and that deal which got done
Questionersituation and that deal which got done when there was no traffic there was 400 million dollars for the airport and another 250 million for the capex they're building a new terminal just that airport alone in 2026 or something is going to be cash flowing north of 200 million dollars a year it's going to be increasing that cash flow close to five or seven percent a year from there on almost to perpetuity and it has no competition and Kazakhstan and landlocked it's actually got a very high per capita income basically it's an asset that was purchased for three times cash flow and airports like that should trade at 30 40 times cash flow really interesting and um and something like that would not be available at those type of prices on the New York Stock Exchange yeah um so is this this is another airport or asset that you you could see yourself owning for 20 years extremely high
Questionerowning for 20 years extremely high quality management team like I said I looked at the business I thought it was an exceptional business the risk you run with airports is Animal Spirits so when some new airport comes up for bid if it gets compared and people are not willing to lose it and they overpay then it's not going to work well so that's always the risk with I think that's the biggest risk would have is there will be only about four or five percent of the airports in the world are private and privately run airports run a lot better LaGuardia now is a private airport and you look at LaGuardia five years ago you look at LaGuardia today and you can't even compare the two and that would not happen under government ownership so moving beyond turkey for a second um you've been in the news a little bit about um recently about your investment
Questionerabout um recently about your investment in Brookfield um is that something you can speak to a little bit
Questionerwe have an investment I don't think we we have anywhere near the upsides we have in places like turkey company like Brookfield it's a very high quality business it's a very high quality team they actually give you five year outlook on what they expect their business to look like in four or five years then they've been doing it for a while and they were actually exceeding what they set at their targets in the past so if the management team is to be believed and if we buy into their targets it'll be a great investment and it's uh Brookfield is a very strong recurring Revenue business it's got multiple assets to business one side is asset management where they have other people's money that they're putting out to work and getting fees and such they
Warrento work and getting fees and such they also have their own balance sheet where they co-invest and so on and they've got mistakes in other companies they've listed in the past and so on and they've just got the quality of the assets that they own across different different Industries is truly exceptional gone after the very best real estate properties they've got great hydro plants and railroads and a number of different interests recently they did a deal with Intel to partially own Foundry that they're going to set up together and they've also now entered the music business the music licensing business and such so I think it's a very good team I've always liked Bruce flat a lot and so yeah we have a stake and we think they'll do fine why why Brookfield ever say a Blackstone yeah so I think I think you could probably buy a basket of these and do
Questionerprobably buy a basket of these and do well I think if you bought Brookfield Blackstone or Apollo all of them if you just put them all in a basket and bought them they would all do well I think Brookfield may do better than the rest mainly because of the DNA differential between them so if you look at KR or a black stone they come from a private Equity world so if we go back to the history of the original funds and Deals and whatever it was a classic lbo private Equity type starting point brookfield's starting point actually goes back a long range several decades and they really were not a manager of other people's money they were really investing their own money and then Bruce flat came on the scene and became CEO maybe more than two decades ago he got rid of all the businesses which he didn't think were that high quality they were in a bunch
Otherthat high quality they were in a bunch of Mining and different things they got rid of those businesses and he focused on extremely high quality long-lived infrastructure assets and the private Equity World generally speaking because it's so competitive did not has not recently and even historically has had very high filters on the quality of the business they always felt that they could buy a mediocre business do some Financial engineering and still make a good return Brookfield didn't take that approach their approach was that at the core they want to have a great asset and then later they want to look at what how they can finance and do other things with it to make it great so I think I I think the kkrs and black stones of the world have moved towards Brookfield in the way they think about it but I think that when I look at this long-term
Questionerthink that when I look at this long-term DNA of how these companies think I just think that Brookfield just from day one had the right DNA was there anything about uh sort of the valuation of it that appealed to you I mean how do you just kind of think about it from a pure evaluation standpoint
Ted Weschlerwell I think I think it's not optically cheap none of these guys are optically cheap they're not expensive either but I think if you look forward if you're a if you're a sovereign wealth fund you're like the Qatar investment Authority Abu Dhabi Sovereign wealth fund and so on you have very large amounts of money to put to work and there are very few entities or places that you can put this this Capital with which are very high quality places very high quality teams and they can they can be there with them for a very long time so it's an oligopoly oligopoly type
Questionerit's an oligopoly oligopoly type business where they're like three fourbusiness where they're like three fourbusiness where they're like three four players that all these guys have to comeplayers that all these guys have to comeplayers that all these guys have to come to at the end of the day when they wantto at the end of the day when they wantto at the end of the day when they want to invest they have to come to one ofto invest they have to come to one ofto invest they have to come to one of these three or four toll bridges to makethese three or four toll bridges to makethese three or four toll bridges to make the investmentthe investmentthe investment and and the assets under management theyand and the assets under management theyand and the assets under management they have is going to grow a lot the carriedhave is going to grow a lot the carriedhave is going to grow a lot the carried interest is going to grow a lot the feesinterest is going to grow a lot the feesinterest is going to grow a lot the fees are going to grow a lotare going to grow a lotare going to grow a lot and they are creative about entering newand they are creative about entering newand they are creative about entering new areas like musicareas like musicareas like music or semiconductor foundries and so onor semiconductor foundries and so onor semiconductor foundries and so on it's fineit's fineit's fine and has the work from home Trendand has the work from home Trendand has the work from home Trend affected them at all or if I mean Iaffected them at all or if I mean Iaffected them at all or if I mean I
Otherthink I think yeah I think I thinkthink I think yeah I think I thinkthink I think yeah I think I think they're I think clearly trophy I wouldthey're I think clearly trophy I wouldthey're I think clearly trophy I would say office properties in general acrosssay office properties in general acrosssay office properties in general across the world are facing much higher vacancythe world are facing much higher vacancythe world are facing much higher vacancy rates than they did before because ofrates than they did before because ofrates than they did before because of this trend and so obviously that demandthis trend and so obviously that demandthis trend and so obviously that demand has gone downhas gone downhas gone down because Brookfield sits at the very topbecause Brookfield sits at the very top
Questionerbecause Brookfield sits at the very top end so they've always wanted to invest in tier one cities in the very best properties the kind of the Trophy Properties in the strike Brookfield Place or Canary Wharf and so on and so these would be the last ones affected and so their rents will go down but the ones at the periphery will just have high vacancy whereas the Trophy Properties will just have lower rents and so yeah I think they have some challenges with their property but also you know these are long leases so it takes a while so even if the a tower is got a lot of vacancy Brookfield may still be collecting rent on it and for example meta has a big the largest the LA the tallest building in in Austin now they signed a very long lease for that and it's still not going to be ready for I think a year or two and they've already put it all up for
Questionerand they've already put it all up for sublease so they're on the hook for that rent but whoever the landlord is not affected by Mara's decision that they don't need that space
Questioneryeah they uh what do they take like a two billion dollar charge last quarter just just on office consolidations
Questionerum so no we actually have a a guy who's going to be speaking about alts later later in the in the session um to talk about Apollo but but some of these other names as well so it'll be interesting to get his thoughts on some of the stuff he said
Questionerum one kind of question somewhat related to Turkey what are the other countries where you're seeing just you know huge discrepancies between fundamental asset quality and price um I know you've I feel like I've heard you mentioned South Korea before but but what are the other countries that screen well for you in terms of just you know
Questionerwell for you in terms of just you know places where um you know things are not as picked over
Questionerwell I I find the whole world is very heavily picked over so it's difficult to find I think that I haven't found any market with the characteristics that turkey has I think that's a very unusual situation who knows how long that'll last Korea is always cheap and I think one of the big challenges we have with Korea is that their birth rates are now well below even China and we need couples to have 2.1 kids to keep population that break even Korea is actually alarming it's down to 0.7 or 0.8 it's Japan is at 1.4 and they they have a declining population so the Korean population decline quite frankly is alarming it's gonna and that's a very strong headwind in investing in any country if you're going to see negative population growth and China also is
Warrenpopulation growth and China also is facing that and and it's a serious issue facing that and and it's a serious issue facing that and and it's a serious issue even in China but Korea out of all of them between China and Korea and Japan even in China but Korea out of all of them between China and Korea and Japan even in China but Korea out of all of them between China and Korea and Japan Korea has the most extreme problems with the birth rate and they've they're trying to press a bunch of levers it's not working very well in Japan there's been an attitude change towards immigration they're trying to bring in more people and I think all these all three of the countries in the long run this is one of the this is one of the huge advantages of the United States the United States is the only developed Nation which has population growth no other developed nation has that Dynamic and we've had that Dynamic for a very long time and we still have population growth going on today and I wish Congress would get its act together and fix immigration and so on and get the continue to get
Questionerand so on and get the continue to get the best of the world coming into the usthe best of the world coming into the usthe best of the world coming into the us but yeah so I think for a lot of thebut yeah so I think for a lot of thebut yeah so I think for a lot of the China JapanChina JapanChina Japan especially Korea that's a big headwindespecially Korea that's a big headwindespecially Korea that's a big headwind So speaking of China the last time weSo speaking of China the last time weSo speaking of China the last time we chatted I you werechatted I you werechatted I you were um bullish on Alibaba I don't know ifum bullish on Alibaba I don't know ifum bullish on Alibaba I don't know if you if you at the time had a position inyou if you at the time had a position inyou if you at the time had a position in it or notit or notit or not um but I think you may have um Ium but I think you may have um Ium but I think you may have um I
Todd Combsswitched the Baba position to processswitched the Baba position to processswitched the Baba position to process which is basically a 10 cent a 10 centwhich is basically a 10 cent a 10 centwhich is basically a 10 cent a 10 cent bet I had studied Baba and then afterbet I had studied Baba and then afterbet I had studied Baba and then after that I studied process I actuallythat I studied process I actuallythat I studied process I actually studied tencent and I just found therestudied tencent and I just found therestudied tencent and I just found there was a big difference in business qualitywas a big difference in business qualitywas a big difference in business quality and Leadership and so we had a loss inand Leadership and so we had a loss inand Leadership and so we had a loss in Baba and so instead of taking the taxBaba and so instead of taking the taxBaba and so instead of taking the tax loss and buying it back Etc I took theloss and buying it back Etc I took theloss and buying it back Etc I took the loss and just switched it overloss and just switched it overloss and just switched it over
Questionerand you've kept your position yeah yeahand you've kept your position yeah yeahand you've kept your position yeah yeah for the most part yeah we kept thefor the most part yeah we kept thefor the most part yeah we kept the process for thisprocess for thisprocess for this have you noticed um uh just on Baba likehave you noticed um uh just on Baba like
Questionerhave you noticed um uh just on Baba like uh any sort of changeuh any sort of changeuh any sort of change ininin um approach just given kind of all ofum approach just given kind of all ofum approach just given kind of all of the stuff that's gone on in China overthe stuff that's gone on in China overthe stuff that's gone on in China over the last year
Todd Combswell I think a number ofthe last year well I think a number ofthe last year well I think a number of things that Baba would in my opinion forthings that Baba would in my opinion forthings that Baba would in my opinion for me would fall into the two heart pileme would fall into the two heart pileme would fall into the two heart pile so it's very hard to handicap what theso it's very hard to handicap what theso it's very hard to handicap what the CCP does with them so they're I think 10CCP does with them so they're I think 10CCP does with them so they're I think 10 cent is a little bit different in thecent is a little bit different in thecent is a little bit different in the sense that they've always been thesense that they've always been thesense that they've always been the they've been very Cooperative with thethey've been very Cooperative with thethey've been very Cooperative with the government they've had very greatgovernment they've had very greatgovernment they've had very great relationships with the government and Irelationships with the government and Irelationships with the government and I think Baba for the most part from what Ithink Baba for the most part from what Ithink Baba for the most part from what I can tell has fixed a lot of those issuescan tell has fixed a lot of those issuescan tell has fixed a lot of those issues but I don't believe their relationshipsbut I don't believe their relationshipsbut I don't believe their relationships with the government is as good evenwith the government is as good evenwith the government is as good even today yeah the other thing uh that'stoday yeah the other thing uh that'stoday yeah the other thing uh that's interestinginterestinginteresting um uh is is Indiaum uh is is Indiaum uh is is India um so have you looked at uh so guysum so have you looked at uh so guysum so have you looked at uh so guys invested in India energy exchange careinvested in India energy exchange careinvested in India energy exchange care ratings I mean he was talking aboutratings I mean he was talking about
Questionerratings I mean he was talking about um what you know I was because I asked him about corporate governance anybody mentioned was that it's highly regulated and so are its counterparties um I know in the past you you've said India has been difficult for you to invest in and I'm just curious if you have any new thoughts on
Otherwe have an investment in Indian energy exchange and I think we own like one or one and a half percent of the company and I think it's one of the highest quality businesses I've seen anywhere in the world extremely good management team very creative and and extremely good execution and even when I bought it one of the one of the things the sad thing like Ferrari is that before the pandemic I owned 4.99 of in energy exchange which is the maximum the government allows foreign investors to own and I paid up significantly 30 40 times earnings for
Othersignificantly 30 40 times earnings for that stake because the business quality was so high and so today for example about eight percent of all the power that is consumed in India is going through IEX and approximately one percent of the value of that power is their fees their revenue and about 70 80 percent of that is just drops the bottom line so that eight percent of power that's going through is probably going to end up somewhere between 15 and 30 15 and 25 and 30 percent of the entire country and India's per capita power consumption today is really low there's the movement towards EVs and all of that so I think our usage will go up a lot in India will go up so Indian GDP is expect to go up like six seven percent a year power might grow up eight nine percent a year over a relatively long period of time and with that type of growth with a
Questionerand with that type of growth with a complete Monopoly position where they are at eight percent of the pie today and it becomes 25 or something in five or ten years that's an exceptional business they started the second business the Indian gas exchange which really shocked me in terms of their attraction so they just started the gas exchange about two years ago two and a half years ago and now they're hitting some months where five percent of all the natural gas consumed in India is running through the gas exchange servers and already even though their business doesn't have the scale of the power exchange something like two-thirds of the revenue is net income pre-tax and that two-thirds will probably go to 80 percent one guy when guy talks to them I think guy and I visited them last year was it last year I think that's when we
Questionerwas it last year I think that's when we visited so guys guys telling them isvisited so guys guys telling them isvisited so guys guys telling them is there a way you can hide the profits isthere a way you can hide the profits isthere a way you can hide the profits is there a way you cannot show the profitsthere a way you cannot show the profitsthere a way you cannot show the profits on your income statement because youron your income statement because youron your income statement because your regulator can see them and you can seeregulator can see them and you can seeregulator can see them and you can see what kind of amazing mouse trap you'rewhat kind of amazing mouse trap you'rewhat kind of amazing mouse trap you're running and of course they're not goingrunning and of course they're not goingrunning and of course they're not going to do anything of the sword it's veryto do anything of the sword it's veryto do anything of the sword it's very high quality team and but that's guy'shigh quality team and but that's guy'shigh quality team and but that's guy's biggest worry is that the all thebiggest worry is that the all thebiggest worry is that the all the economics are visible but the thing is Ieconomics are visible but the thing is Ieconomics are visible but the thing is I think that the The Regulators reallythink that the The Regulators reallythink that the The Regulators really love IEX and igx and they really look atlove IEX and igx and they really look atlove IEX and igx and they really look at it as a National Asset and I think thatit as a National Asset and I think thatit as a National Asset and I think that part of the reason they do so well andpart of the reason they do so well andpart of the reason they do so well and they put so much to the bottom line isthey put so much to the bottom line isthey put so much to the bottom line is this High how well the business is runthis High how well the business is runthis High how well the business is run and I think The Regulators understandand I think The Regulators understandand I think The Regulators understand that under different leadership andthat under different leadership andthat under different leadership and ownership they would not have thoseownership they would not have thoseownership they would not have those numbers and so it's just a really goodnumbers and so it's just a really goodnumbers and so it's just a really good business and yeah I am looking at it
Questionerbusiness and yeah I am looking at it again to see if we should increase our stake I think the gas exchange there being forced to divest their position down to 25 percent in a couple of years two two three years and so they'll do an IPO of that and the market cap of that in a few years probably going to match or exceed what they have for the whole whole business
Questioneryou uh been following this Fiasco with the adani group oh yeah sure yeah Indian mutual funds by and large other than the index funds don't own a darling don't own any of the adani companies even though it's a very large portion of the market more I don't know any investors value investors any investor that I interact with in India whoever had any stake in adani I think is that because of his reputation or just some or evaluation or some other I think that it's clearly optically and otherwise
Questionerit's clearly optically and otherwise it's very expensive it's always been expensive and so it's difficult to justify those numbers and so even the Hindenburg report they start off the first thing they say is valuation yeah and they bring up a bunch of other things now I have no idea how real or not real those other aspects are it is true that the quality of the businesses and the quality of the assets they own is exceptional they own most of the private airports in India ports and a lot of the petrochemical infrastructure pipelines transmission lines and so on these are really very high quality assets the questions are swirling around the rest of it and I don't need to have an opinion on 98 of what goes on I only have an opinion on the stuff that we were actually going to invest in so it's really irrelevant from my point of view we'll buy some popcorn
Questionermy point of view we'll buy some popcorn and watch the movie yeah um as far as uh just following up on um kind of our previous discussion you've always been a big fan of uh of Jeff Bezos and Andy jassy and all that um have your thoughts on Amazon changed at all over the last year
QuestionerI mean I think it's the probably the most exceptional business ever created in the history of mankind this it's an amazing amazing what they have put together and what they so I think the DNA of Amazon is just an incredible DNA and and under Jazzy I've always not liked their retail business where they take ownership of the products that that business I've always hated retailer and stuff and he seems to think like that too he's not a big fan of that business and I think it's easy to not be a big fan because when you look at the numbers they're not to look that great but other
Todd Combsthey're not to look that great but other aspects of the business that they're doing fulfillment and advertising and all of that those are great and so I think Amazon to think about a business which was a consumer Commerce business to have this massive footprint in Enterprise core web infrastructure that leap that's a big leap okay and they made that leap and they ran circles around everyone else Amazon is the kind of company where you don't even know what businesses they'll spawn and be in in 10 years and and that spawning engine is very much Alive and Kicking so I think under Jazzy he's going to de-emphasize the businesses that have lower return than equity and all of that and I even now seen they're looking at BuyBacks and things where they're actually starting to generate more cash than they need incredible business and like I said
Questionerneed incredible business and like I said I've always been I've always been too I've always been I've always been too I've always been I've always been too dumb to buy it and I'll probably be too dumb to buy it and I'll probably be too dumb to buy it and I'll probably be too dumb to buy it forever we'll see I was gonna ask I mean the stocks obviously gonna ask I mean the stocks obviously gonna ask I mean the stocks obviously struggled for the last two years and struggled for the last two years and struggled for the last two years and um you know it's it's not at its lows um you know it's it's not at its lows um you know it's it's not at its lows over that period but it's um it over that period but it's um it over that period but it's um it certainly got a long way to go before it certainly got a long way to go before it certainly got a long way to go before it gets back to its highs I mean is is gets back to its highs I mean is is gets back to its highs I mean is is there do you have a a price point in there do you have a a price point in there do you have a a price point in mind where you would mind where you would mind where you would um potentially take a position um potentially take a position um potentially take a position
Otherone of the one of the mental blocks I one of the one of the mental blocks I one of the one of the mental blocks I have which probably hurts me more than have which probably hurts me more than have which probably hurts me more than it helps me it helps me it helps me is the law of large numbers is the law of large numbers is the law of large numbers so so so when you look at when I look at when you look at when I look at when you look at when I look at businesses 500 billion trillion businesses 500 billion trillion businesses 500 billion trillion 2 trillion market caps which are the 2 trillion market caps which are the 2 trillion market caps which are the highest they've ever been for any highest they've ever been for any highest they've ever been for any business in the history of mankind business in the history of mankind business in the history of mankind and then when I look at how many and then when I look at how many and then when I look at how many businesses large businesses like that businesses large businesses like that businesses large businesses like that survive for 100 years 50 years and that survive for 100 years 50 years and that
Todd Combssurvive for 100 years 50 years and that sort of thing the death rate is really high right and and these companies if you look at a business like apple I don't think I can see anything on the radar that's going to affect Apple for 10 years I think it's just a great franchise it'll keep going I don't know if I can make that statement for 20 years or 30 years or 40 years I can make it for 10 years but when you're trying to buy Apple the 2 trillion whatever it's at you need to have a view 15 20 years out you need to have some viewers I know that Ferrari will be cranking 15 20 years from now I know Hermes will be cranking 20 years from now 40 years from now 80 years from now I was having a discussion with Charlie a few months back where I told him that if I look out a hundred years or 200 years I think the railroad in Berkshire will be intact and doing great even if we get
Greg Abelbe intact and doing great even if we get to maglev or some new technology the right of way and the need for humans to move Goods that's probably the most efficient way to move good so that's that mode is almost a indestructible mode and I said most other things I see in Berkshire I don't I can't make a comment that 100 or 200 years from now they'll still be there and Charlie corrected me he said our power business is pretty good too and he's right yeah the utilities and power business that they have is another amazing business and again that's unlikely to change in terms of how we get our electricity and power and all of that and insurance Apple a whole bunch of other businesses see candy and others that Berkshire is in hard to make a statement that it'll be around 100 years from now they will maybe but I don't know and so when you
Questionermaybe but I don't know and so when you get to these large very large market caps this is the issue that bothers me is that you look at something like lvmh a huge market cap I would say someone like lvmh has a much stronger chance of being with us 50 years from now than Amazon does even though Amazon looks just totally dominant today so my take is that when I get to some of these really large market caps is really and tencent was an exception for us is to really go back to trying to find the next Compounders at smaller market caps that can get long runways and get there so that's where I am now you'd put Microsoft to the same bucket as Apple
Questionerno I think I think Microsoft between the two businesses I'd be more interested in Microsoft than Apple and one of the reasons is that so if you think about the iPhone it's actually a very clergy device this is
Otheractually a very clergy device this is wherewherewhere Mark Zuckerberg is going to soMark Zuckerberg is going to soMark Zuckerberg is going to so the iPhone most of us don't reallythe iPhone most of us don't reallythe iPhone most of us don't really particularly care about the phone partparticularly care about the phone partparticularly care about the phone part of the iPhone that's really irrelevantof the iPhone that's really irrelevantof the iPhone that's really irrelevant it's really a computer we carry aroundit's really a computer we carry aroundit's really a computer we carry around if I'm using it to as to map where I'mif I'm using it to as to map where I'mif I'm using it to as to map where I'm walking to or where I'm going towalking to or where I'm going towalking to or where I'm going to it's a clergy thing to have this thingit's a clergy thing to have this thingit's a clergy thing to have this thing in my hand or whatever or havein my hand or whatever or havein my hand or whatever or have directions being fed to me in my yearsdirections being fed to me in my yearsdirections being fed to me in my years or whatever so I would say that theor whatever so I would say that theor whatever so I would say that the human factors in the long run of how wehuman factors in the long run of how wehuman factors in the long run of how we interface with technology which is youinterface with technology which is youinterface with technology which is you know we get to your favorite subject theknow we get to your favorite subject theknow we get to your favorite subject the metaverse ismetaverse ismetaverse is an unpredictable direction that we willan unpredictable direction that we willan unpredictable direction that we will be heading to at some point okay andbe heading to at some point okay andbe heading to at some point okay and when we head in that direction it is awhen we head in that direction it is awhen we head in that direction it is a big unknown where Apple fits it okay itbig unknown where Apple fits it okay itbig unknown where Apple fits it okay it may well fit in and it may not fit in wemay well fit in and it may not fit in wemay well fit in and it may not fit in we don't know we don't know I know at somedon't know we don't know I know at somedon't know we don't know I know at some point this technology of all this stuffpoint this technology of all this stuff
Questionerpoint this technology of all this stuff a lot of it goes into the cloud some ofa lot of it goes into the cloud some ofa lot of it goes into the cloud some of it is with us and some of it becomesit is with us and some of it becomesit is with us and some of it becomes wearable or whatever else where thatwearable or whatever else where thatwearable or whatever else where that whole thing sorts outwhole thing sorts outwhole thing sorts out is unknown and that's why I sayis unknown and that's why I sayis unknown and that's why I say we don't know 20 years from nowwe don't know 20 years from nowwe don't know 20 years from now Microsoft's business is a lot moreMicrosoft's business is a lot moreMicrosoft's business is a lot more Enterprise drivenEnterprise drivenEnterprise driven and so to me that has more resilienceand so to me that has more resilienceand so to me that has more resilience than a purely consumer-driven businessthan a purely consumer-driven businessthan a purely consumer-driven business that that Apple has and and apple has athat that Apple has and and apple has athat that Apple has and and apple has a lot of Goodwill amongstlot of Goodwill amongstlot of Goodwill amongst the consuming public a lot of trustthe consuming public a lot of trustthe consuming public a lot of trust great brand but it doesn't have the samegreat brand but it doesn't have the samegreat brand but it doesn't have the same kind of nuance with all those companieskind of nuance with all those companieskind of nuance with all those companies in the App Store even giving them the 30in the App Store even giving them the 30in the App Store even giving them the 30 and all of that so there's animosityand all of that so there's animosityand all of that so there's animosity with that groupwith that groupwith that group and Amazon for example doesn't haveand Amazon for example doesn't haveand Amazon for example doesn't have their animosity all the Enterprises thattheir animosity all the Enterprises thattheir animosity all the Enterprises that work with Amazonwork with Amazonwork with Amazon don't have a negative view on thedon't have a negative view on thedon't have a negative view on the companycompanycompany a lot of the App Store developersa lot of the App Store developersa lot of the App Store developers believe that the 30 is too highbelieve that the 30 is too highbelieve that the 30 is too high and and they think for what they add was
Todd Combsand and they think for what they add was what Apple adds so it that part of the business is not a win-win in my opinion I think the take rate is too high and on the consumer side they do a great job Apple's a great business I think 10 years like I said I don't see anything might be doing well in 20 years but I wouldn't want to make that back
QuestionerManish uh before we close uh you'll find this interesting my wife is going to be uh talking about inflation um she's the head of uh she's the head U.S inflation strategist at JP Morgan and I was going to ask you um you know we live in a world right now where there's just enormous geopolitical risk and and macro has just absolutely dominated the markets over the last you know really for the last year I mean all of 2022 I feel like was a write-off thanks to the FED uh for all of us who are not invested in Turkey so I was
Questionerare not invested in Turkey so I was curious you know do you have any views on on where inflation is heading how quickly it might be contained I don't get thoughts on wages which is a a big sort of part of the problem in terms of you know just being stickier than other parts of um uh inflation I'm just curious if you had any macro thoughts for us um on and if any of it keeps you up at night
Greg Abelyeah probably not my strong suit but I would just say that we've got a great Central Bank an independent Central Bank they may not always get everything correct they may undershoot overshoot all of that that's part of the deal but I think they will look at the data and for the most part they'll accidentally so I think over time we'll get to where we need to get to and I don't know if that happens in one year or two years or how long that takes but the US the U.S economy is
Questionerbut the US the U.S economy isbut the US the U.S economy is surprisingly with all the amount ofsurprisingly with all the amount ofsurprisingly with all the amount of money that's been pumped into themoney that's been pumped into themoney that's been pumped into the economy inflation is still pretty benigneconomy inflation is still pretty benigneconomy inflation is still pretty benign relative to all that the unemploymentrelative to all that the unemploymentrelative to all that the unemployment rate is unbelievable it's the economy israte is unbelievable it's the economy israte is unbelievable it's the economy is cranking really well and and it's stillcranking really well and and it's stillcranking really well and and it's still firing cylinders it's a great greatfiring cylinders it's a great greatfiring cylinders it's a great great engine I wouldn't have predicted all ofengine I wouldn't have predicted all ofengine I wouldn't have predicted all of these things given you know where we'rethese things given you know where we'rethese things given you know where we're coming fromcoming fromcoming from but here we are and we're doing greatbut here we are and we're doing greatbut here we are and we're doing great you don't foresee any sort of recessionyou don't foresee any sort of recessionyou don't foresee any sort of recession coming anytime soon it sounds like Icoming anytime soon it sounds like Icoming anytime soon it sounds like I
Otherwould probably be a really bad person towould probably be a really bad person towould probably be a really bad person to make those types of calls I never sawmake those types of calls I never sawmake those types of calls I never saw 2008 coming easy either I did see the2008 coming easy either I did see the2008 coming easy either I did see the bubble in 2000 before that happened so Ibubble in 2000 before that happened so Ibubble in 2000 before that happened so I was able to sidestep that one but I tookwas able to sidestep that one but I tookwas able to sidestep that one but I took the full brunt of 0809 so yeah I'm not athe full brunt of 0809 so yeah I'm not athe full brunt of 0809 so yeah I'm not a good guy on on that front I don't knowgood guy on on that front I don't knowgood guy on on that front I don't know where things end up on that front andwhere things end up on that front andwhere things end up on that front and I'm trying to make bets where
Todd CombsI'm trying to make bets where those types of events don't have that much impact you know I think that's why we I have an interest in things like IEX and I have a interesting things like resource and tab and the co-bottler and so on so I think those are more interesting to me because I don't have to think about these things too much
QuestionerI think it's a fair point Monique this was great um super interesting as always to hear your thoughts on the world and and obviously your portfolio um we'll we'll certainly follow up regarding the the turkey donations um but but thanks again for your time and looking forward to uh chatting again soon
Todd Combslikewise it was always it's always fun Vivia and Guy thanks for attending
Otherthank you