Davis Funds’ Chris Davis on the Earnings Yield

the model and see what it spits out. Here at Bloomberg Intelligence, all of our models are data driven, so we're happy to use consensus in it, and it's available for clients on bi stocks Go if you'd like to download a copy yourself and enter in your own estimates. But nonetheless, with those macro own rate consensus estimates in there, you get about a nineteen point one times multiple on

the S and P five hundred. You might be saying, well, that's well lower where we are today on the whole index, But what's really going on is the mag seven is driving a lot of the valuation premium in the S and P five hundred, And if you were at it instead, envision what the SMP equal weights multiple is. Back when we did it, the trailing PE was about twenty point three earnings and eighteen point four times forward earnings, So nineteen point one pretty much smack dab in the middle

of those two. On the other side of the model next twelve month EPs growth, macro rate consensus would only imply about six percent EPs growth. That's well below what the bottoms up consensus is for the whole index. But again, just looking back at what the equal weighted index has forecast for itself, you're getting pretty close to that instead.

So it's really been an outsized influence of the max seven on the S and P five hundred, driving the premium, driving the earnings growth at least of late, and consensus would expect that gap to narrow over twenty five and twenty six, driving a lot of the great rotation that we've seen since June at least. But I will note though, that we did a bit of a deeper dive into the economy and downloaded some of the tables from the BEA and combining pretty much all of the tech and

tech related industries and comparing that to gross output. Those industries are only about fourteen point six percent of the whole economy, and this is really what's driving a lot of that issue or a detachment between our model and what's going on in the S and P five hundred,

because our model is very macro based. Meanwhile, if you look at the S and P five hundred, and we did it on a BIX classification, which is Bloomberg's industry classification system SMP five hundred tech by itself is thirty percent of the S and P five hundred, So a lot of the reason why macro estimates and the rest is detaching from SMP reality right now.

average stock may be more attractive. But when you couple that market characteristic with what we would say is a very trans transformational time in the economy where a lot of traditional business models may be much more at risk than they used to be. We think the simple knee jerk reaction to rotate into value may be a little

short sighted. You're going to have to be very specific when you look at all of the underlying transformation happening in the economy and monetary geopolitics, a high technological disruption. There are a lot of models that have been carved in stone for fifty or sixty years that are looking more and more fragile. So it's a very interesting time to invest, definitely.

children or something like that, I know the feeling. He said, he didn't want to rob us of the opportunity of making an honest living. So and then my father was also a great investor, and he started at the Bank of New York and then started the Mutual Fund Company in the nineteen sixties in the Go go years, a time of hot tech and telecom, and he had sideburns, and you know, the seventies was such a humbling time that in a sense, we put together both of what I think of as the real sort of heart of

each of their investment philosophies. I would say it was a similar investment philosophy but applied in two different eras. And that really has become the heart of what we do. So I grew up, you know, I used to say, I grew up at our table with advice like, oh, never trust a bear market rally on a Friday. So it's a very narrow family business sort of dynamic. But of course what really mattered the most, David is is

both of them loved what they did. They just saw you know, this opportunity to study businesses, to study success, to look at the business as the people, to be able to co invest alongside into these great sort of growth companies, generational wealth builders. Was such an exciting way to live versus being a creditor, being a lender, being

a banker. And so I just grew up lucky to have been sort of immersed in this from a young age by two people that loved what they did for a living, and that that has made an enormous business, enormous difference in sort of my own career path.

And what we would say is the trouble is often growth investors are very complacent about the durability of a growth rate, and we're very skeptical because capitalism is vicious, and when somebody has high returns and high growth, it attracts competition. And if you need ten or twenty years of growth to get your money back, that can happen,

but the probabilities are very low. So in that sense, we're very skeptical of the momentum style growth investing that has sort of characterized a lot of aggressive growth type managers. We think they're complacent about the durability of growth. They underappreciate the viciousness of competition and dislocations and disruptions. So in that sense we firmly in the value camp. But on the other hand, we also recognize that what Warren

Buffett used to call cigar butt investing. You know, finding a net net something that's got a book value of one hundred and is selling at eighty and you think you can't lose money, Well, of course you can if the company's not liquid eating and if they continue to reinvest your earnings at three or four percent return on incremental capital, that's going to be a classic value trap. So we think that companies that have durability and resiliency are very valuable if they can grow over time, So

we sort of land between the two. In our hearts, we think of ourselves as value investors, but I never bought a company that I thought was going to be earning a lot less five or ten years from now than it is today. So in that sense, we end up back in the growth camp.

few companies that embody both of those characteristics. So we end up with a portfolio that is highly selective, right where we may have you know, thirty companies being you know, eighty percent, forty companies being eighty five percent or so of ninety percent of the assets of the funds. So a concentrated approach, because we really, in essence, we are rejecting sort of nine out of ten companies that we look at in the S and P. Five hundred and owning a portfolio of thirty to forty out of the

five hundred. So it's a very selective approach. But the result of that selectivity is we own a portfolio of companies that today trades at about thirty five to say thirty five percent discount to the sorts of averages that Michael was talking about in the market today, so trading at fourteen fourteen and a half times earnings versus a market at let's say nineteen or twenty. And yet and yet our companies have grown their earnings over the last five years at a rate that is essentially the same,

maybe even slightly higher than the averages. So we call that a value investor's dream when you're able to, in a sense, have both of those and that's what we see today, and that selectivity is sort of a core characteristic of what we do, and of course it reflects the fact that we're the largest investor in our own strategies. Right, we eat our own cooking, you know. This is we

think of it as trying to build generational wealth. So we're not interested in some sub index how do we do versus We're interested in building wealth over time and so owning a relatively small number of durable businesses with resilient long term growth, purchased at attractive prices, run by managers that have sort of equal parts. We think of integrity and industry and intelligence. That's the sort of formula, and it's messy putting it into action. But we've been

at it a long time. I guess I became the manager here in I think nineteen ninety four something like that, So it's been We've gone through some interesting markets in that time, and the fund itself having started in nineteen sixty eight or sixty nine, that's getting to be some real mileage.

the hell would you own inequity, which is riskier. You're the last call on the cash that the business produces, below all of the creditors, So why you take a comparable multiple. Well, the answer is because I think it's going to grow over time. But remember that five percent. If it grows ten percent a year, that sounds great, But you're only up at five and a half percent the next year. Now, depending what you use for a

discount rate, you may be treading water. Now if you start in our portfolio at a fourteen or fifteen times or all of a sudden, you're starting with a seven or a seven and a half percent yield right now, that yield growing it. You know, let's say you know, seven, eight, nine, ten percent. All of a sudden, it's seven, it goes to seven, seven, it goes to eight and a half, it goes to nine point four. And you see the

power of compounding over time. Now, because we're very low turnover investors, we tend to own these businesses a long time. That earnings yield over time is how we look to generate our return. We're not predicting changes in the multiple, but we do think when you start at a high multiple or a low earnings yield, you need a lot of growth just to get to the risk free rate. You started thirty times earnings, had three percent, you got

to double it just to get to six. Right. So that is the mindset we have is instead of thinking pe, which is sort of an abstract idea, think about the earnings yield and then think about how long if you owned one hundred percent of that business, how long do you have to own it just to get to a

ten percent return? Right? And then if it's a business where you're paying fifty sixty times earnings, so you're starting at one one and a half percent earnings yield, and you say boy that's got a double two or three times before I even get to a ten percent return. Well, that could happen. But once companies are quite large, you know a lot of people are gunning for them, and

you could get a lot of competition. And you look at you know, as we look out at this world of AI, you know, look at all the obvious winners in the early days of the Internet. Most of them don't exist anymore. Yahoo, Netscape, I mean, Cisco's a shadow of what it was. I mean, those those were the absolute sure thing winners. You know, well into the dawn

of the Internet. It wasn't like they it was still in a fort you know, you were about eight years, nine, ten years into the Internet, and those were the obvious winners to everybody. And of course no price was too high, and you were essentially, you know, if you had that

portfolio pretty well wiped out. And so we think there's a lot of danger when people are trying to predict winners early, paying huge prices with an enormous amount of success booked in because that one percent errings yield, you know, to get it up to a ten percent errings yield, you need a lot to go right over a long period of time, and capitalism is vicious, so it's not quite so easy. So as I say that, I think is when I think about multiples, invert it, think about

earnings yield, and then it starts making sense. When investors think about their returns going forward, the earnings yield is the right starting point, and then you've got to think about, well, why should it be higher a year, two, three, five, eight years from now. I mean, after all, there are some wonderful companies that are earning a fraction of what they earned ten years ago, and that sort of dislocation and disruption. You know, people underestimate, and you've seen some

consumer stallwarts. I mean, we look at what's going through wonderful companies like Laughter or Anheuser Busch or or Diagio. I mean, these are great, durable companies, but you know, their earnings have been killed and their multiples have come way down. And so again we don't think the value side is a safe place in a tumultuous world, and within growth can be a very complacent place to be, and so you've got to navigate this tightrope that we think is what selectivity allows.

understand what is the culture. Why is it that you could have two companies selling the same regulated product, headquartered almost in the same city, with the same market cap, where their product has to be filed with regulators so they can't have a secret sauce, and one of them, over a course of about twenty years, grew at twenty one percent a year and one of them grew at six. Now, the examples that I'm using are Ohio Casualty and Progressive.

They both sell auto insurance. Essentially, they're both headquartered in Ohio, not far apart. I think one was in Columbus and one in Cleveland. But yeah, I'm a New Yorker, so it's close enough. And you know, and of course the difference was culture. Progressive had a totally different mindset as a company, a spectacular management, a culture of quantitative excellence, service excellence, urgency, discipline, creative thinking, I mean, amazing for decades.

So when we try to evaluate management, I said, we want, you know, integrity, intelligence and intensity in a sense. But when we build that mosaic, what are we looking for, Well, we're looking for clues. Of course, we visit almost every company we own, you know, so we're trying to see do they keep a good team together. We're looking at their accounting choices. David Michael, that's an interesting one. You know.

Gap is a very wide measure, and you just say, look, if somebody ran a private business and you're reporting your income to the tax authorities, I'm going to assume you're honest. But if you're honest and you're reporting your income to the tax authorities, you choose accounting policies that minimize current reportable income, right, So you expense things aggressively, use short amortization schedules and short depreciation accelerated depreciation schedules. You may

defer revenue, you'll put up reserves. You know, you'll do everything you can to make it look like the company is not earning a lot of money. Now, if the same company reports its earnings to a perspective buyer, they may choose the opposite policies, again legal but very aggressive depreciations. They may start capitalizing a lot of software, R and D things that they could be expensing. The concept that we're trying to get at here was one that my

grandfather talked a lot about. It was called owner earnings. Right, if you own the business, you reinvested enough to protect the core and maybe grow at the inflation rate. Everything else you have discretion over. You may choose to expand your business, but then what's your incremental return on that capital. You may choose to pay big dividends. You may take that money and say I'm going to go buy a competitor. But whatever it is, when we look at the business,

that's the mindset we look at. So the capital allocation decisions, the accounting choices of the management, the ability to keep and retain good people, how do they communicate with us? I mentioned progressive Peter Lewis, the CEO of Progressive, wrote every in your report himself. You know who else writes their in your reports? Well, I mean, of course Berkshire marcl Let's see, Jeff Bezos did not many. You could probably count on two hands the fortune five hundred CEOs

that take the time to write their own annual report. Well, that's a signal. That's a signal that they view their shareholders as a partner, They think of themselves as entrusted with shareholders' equity, and they're giving an accounting. So they're all these sorts of tiles that we build around evaluating a management. The proxy is a great place to look. You know. Is it an interesting that Exxon has a compackage as I recall, that vests something like ten years

after retirement. Right, that's a very that tells you a lot about the culture of that company. There's not another company I've ever known that's done that. So we're building a mosaic to try to get a sense of culture, of the durability of a culture. Uh. You know, and the press is a terrible way to start that because the president almost always a halo effect. We're looking for

those outsider type of CEOs. Understand capital allocation, understand excellence, don't fool themselves, keep the egos in check, keep great people, you know, value, have a stewardship gene. That's but it is the most fun part of the job. It is the most because in a market that's pretty damn efficient, you have to look for pockets of inefficiency, and one of them is crowd psychology. Obviously, when you get a stampede out of an area, sector or a company, you

can get real inefficiency. Think of Meta just a couple of years ago. I mean, the company didn't change, but it was down and at a market cap smaller than home Depot, with two billion customers and the number of customers growing in every one of their businesses, and not just what I well, the number of users growing. So you had grown users on all three platforms and growing

engagement per user on all three platforms. And yet the stock was down seventy percent because everybody said, oh, you know, your grandmother looks at Facebook, but you know the kids are all on TikTok. It was just headlines. But or Mark Zuckerberg's an idiot because he's spending money on you know, the new computing platform. Well, there's a good example of if a CEO is willing to defer earnings, right, so there's a guy who is not maximizing current reportable income.

We view that as a good sign. Right. So anyway, those are all examples at management. But it is obviously one of my favorite parts of the job.

started our financial sector fund. I think I started it in nineteen ninety maybe Now that was partly because I had worked at another firm and when I came to, you know, work with my father, I said, look, you know, nepotism is a dangerous thing, and you know, we don't want to be employer of last resort for people with the same last name. But that was back in the late eighties early nineties. So what was happening in the world then, Well, we had gone through the SNL crisis,

and so banks snls were hated. Right, There's a huge commercial real estate debacle, and our feeling was there were enormous opportunities to find durable growth companies in a sector that was widely out of favor. Now you come up to today, the memories of the financial crisis are still so vivid that banks remain even though they've had a nice move, they remain I think, without question the best combination of durability and low valuation and so and this

idea that people don't differentiate between banks. Oh I like banks, I don't like bank. There's huge differences in culture and business model and valuation. And so that's when I started our financial fund. I started it because I said, within financials, we should be able to find companies that have below average valuations above average growth prospects. And that strategy has outperformed the S and P five hundred for thirty years,

right only only in financial stocks. Now you can't acial index underperformed the S and P five hundred, so you have to be very selective. So that's the theme we really see in our large cap strategies today. That is one of the anchor themes. And if you want names, I mentioned Progressive. So today the analogy I would use for progressive is Capital One. Capital one is a fintech company disguised as a bank. It's still run by the founder. I think it's the sixth largest bank in the country.

The founder started it. I think he was the top of his class at Stanford Business School. He started a technology company without a single branch, without a brand, and built it into one of the largest banks in the country using data science. Right. They just they basically said, how do we target and offer to David who has a different interest in a credit card than you have, Michael, he's a big spending revolver. You're a prudent points gatherer,

you know, whatever it is. And so and Rich Fairbanks still runs that company, and by the way, still writes his own in your report. And so there's a company at nine or ten times earnings with a return on equity that I think has been you know, I don't want to make up them number, but I want to say that it's been thirteen or fourteen percent for twenty

five years. They will understate earnings when they're growing aggressively because of the foolish nature of the what bank accounting has come that forces you to put up all the reserves you ever expect when you make the loan. Anyway, some complex accounting there. But so I love that. You know, we've had a big holding in Wells Fargo for a long time. It's the cheapest of the big banks relative to the quality of the franchise. It's been a long,

sluggish turnaround, but it's getting there. I love Markel, you know, it's just a fabulous boutique insurance company that's got a lot more going with it. But so financials is sort of a good example of a theme. And then i'd give you one quick second theme just to say, you know, people overvalue that smooth, steady line of earnings. They think

that makes them feel safer. You know, we always say we prefer a lumpy fifteen percent to a smooth twelve And so you know, a company like applied materials or certain types of industrial companies where the earnings are lumpy in any year or two, but over time they're just compounding machines. I mean, I've studied applied materials since nineteen ninety six, and you know there's nobody in a garage that's going to figure out how to do chemical vapor

deposition better than applied materials. So you know, they're an arms dealer to a massive growth industry. And you know, Taiwan Semi cannot build in videos chips without spending a fortune buying applied materials machines, and we like that that model. So that's a lumpy company and people undervalue it because they don't know what it's going to earn six months or a year from now. But what we do know is it's going to earn a lot more five and ten years from now that it earns today.

in a bank, the number one biggest cost is interest. The number two biggest cost is the cost of foolishness right making loans and not getting paid back, or pricing insurance policies, and usually those were not correlated to size. But I will say that I do think something really has changed in financials. The technology costs have gotten so high and the compliance costs have gotten so high, and both of those are scale advantages. So I'm looking at

the gap. I'm looking into some mid size financials. We did buy some during that crazy First Republic, you know, Silicon Valley Bank, Mayhem. There were some people that got thrown out with the bathwater. But boy, it is amazing the cost of simply regulatory compliance and technology are so huge that it's not surprising that the biggest banks have continued to gain share, share of profits as well as share of deposits.

Totally different political systems, different valuations, different currencies, different central bags, different industrial outlooks, different trade relations, different geopolitics, and yet somebody called them bricks and said you got to own the bricks or not own the bricks, right, And then of course you know we saw it in now the Magnificent seven. What was it before when it was what were this group of tech stocks call when you had Netscape.

I mean, oh you know the anyway it was four horsemen.

would say tech is too broad a sector. And of course, the the index folks have done their best to spread it out so that it doesn't look like, oh, we'll call you Google, we're going to call that media, and we're gonna we'll call this one technology, and we'll call this communications. I mean, but but what I would say is that certainly momentum has had one hell of a run. And the funny thing about momentum is that it works so well that people just go along with it, and

yet it defies common sense right. If you go to the grocery store and the cost of stak has gone up every week for six months, you don't want to buy more, you want to buy less. And of course the price you pay is a determinant of your return. If you pay a higher price for the same stream of cashflow, by definition, you have a lower return going forward. And yet the theory of momentum investing that the more it's gone up, the more attractive it becomes. It simply

works until it doesn't. Now, I once had a colleague that I worked with, and I liked him a lot, but we had to part ways and we got very frustrated at one another because he was always looking for a system. And I have a sign on my wall it's a Las Vegas pit boss. And the Las Vegas pit boss said, we said limos for guys with systems.

But he said to me, you know, so he wanted, Oh, I look at the fifty two week down list, and then I look from you know, and I find an algorithm and it worked a lot of his stuff worked, so I but I wouldn't do it, and he said he got so frustrated. He said, look, Chris, if I had a blind monkey in my office, and every day the monkey pointed at the stock charts, and every day it pointed to a stock, and that stock went up every day, day after day, week after week, month after month,

year after year. You get five years of the monkey never missing once, and you still wouldn't buy that stock. And I said, of course I wouldn't. It's a blind monkey. Like we have the savings of life, savings of teachers and you know, people that have worked their whole life to save, and the idea that, well, it works, so I may as well capitulate and go along with it, even though the math doesn't make any sense to me.

We're just not going to do it. And that means there are worlds like we've been in a lot of the last ten years, where we're going to produce good absolute returns, but we're going to lag on a relative basis because we're not getting on that wagon. But the one thing I'll say is, you know, just because everybody else was doing it really feels stupid in retrospective, it goes wrong. And I think the blindly indexing because it has worked so well where you're automatically putting in the

most money into what's already gone up the most. I think in retrospect, there are a lot of fiduciaries that may feel foolish that they were saving, you know, twenty basis points of fees and just outsourcing stock selection to a momentum strategy. Now, that may be sour grapes, and the index has certainly been a monster, but there have

been other times that it was hard to beat. There's a manager I admired, Jim Gibson, who had performed the index for seventeen years leading up to the year two thousand and for eighteen years, he was ahead for eighteen years. You know, you can get some pretty dramatic changes, and so you know, I'm not predicting that, but we're we're not changing our approach either.

delicate balance. Now I can tell you if I managed my own money, like my own account, right, I put my money in the funds. If I manned my own account, I probably wouldn't sell because I'd say, I, you know, I don't need to pay the tax. And but you know, going back to the idea of that teacher that has life savings, with us, maybe having twenty percent in one stock is just too risky. So we do have to ballence that cell discipline. We never have price targets, but

we do have valuation. We have an IRR mindset, and when an IRR gets down to three percent, four percent, five percent, you know, you start thinking, well, if we're going to hold this, we must think there's something wrong with our IRR model, because otherwise, why are we accepting that return? And the answer is usually when we've sold those and been wrong, it's because an IRR model has a really hard time capturing something that can grow for

twenty five years. Right. It's just I mean, we sold Costco. We're the largest shareholder of Costco for more than a decade, and it's a glorious company, but at twenty two twenty three times earnings, it just felt like that is we're starting with a four or five percent IRR and you're getting closer to store saturation. We don't know what store saturation is, but we just know we're a lot closer

to it. And it's just, you know, the multiple has expanded another fifty percent, and the sales grew way more than we thought, and they were more successful internationally, and so we need to be open to where our IRR model misses that sort of the durability or the duration of the growth. As I said, you don't want to bet on twenty year growth being sustainable, but when it is, oh my god, you make so much money in that last five years because you know, those last few doubles

are such a multiple of your initial start. So we do you know, the ir mindset does force us to sell evaluation, and certainly for the last fifteen years that's almost always been a mistake. But over the course of time, we think it's part of our duty. You know, we're you know, we feel we haven't owned Nvidia for the last three years, but we're you know, we're neck and neck with the market over that last two or three years, and so I'm proud of what we've owned and how

it's done. And we've just had to have the discipline to recognize that watching other people, you know, hit extreme low probability winners. Should you know, as I say that the number one investment made by anybody this year is going to be some guy that bought a lottery ticket and wins one hundred million dollars. Nobody will get a return like that on any other investment. That will be the highest IRR and one year I RR. But it doesn't mean it's a good approach just because somebody did

it and it worked. So we've got to stick with what has worked for us for fifty years.

same thing happened again with Obamacare. If you were to look at a list, I have not done this, so you guys would have to fact check me on this, But I would bet if you were to look at sort of the top stocks of the last twenty years, you know, from Clinton to today, I would bet United Health is on that list. And you would have bet there were so many opportunities when you would have said, oh my god, the changing political tides are going to

destroy that business. And by the way, maybe rightly. So. You know, it's a strange industry to have employers buying health insurance for their employees, but it has proven unbelievably resilient. I mean, if you think about the war on tobacco. We don't own tobacco, but it is amazing that Philip Morris, it may have been the best stock for the last fifty years. So there is a tendency to really overreact

to politics. And it's not that the changes won't be incredibly important, it's just they'll be likely unpredictable, and so you know, I would certainly say the likelihood of government spending coming down seems low, of deficits coming down seems low, and higher deficits with a low interest rate environment doesn't make sense to me. I think modern monetary theory is one of the great idiocies to be foisted onto a

responsible nation. The idea that if you have the reserve currency, the amount of debt and the amount of currency issue doesn't matter. Well, that's true until you're not, until doing so makes you not the reserve currency. So it's a tautology and it's a very dangerous one. So you know, I would say I am always well I'll quote my you know, wonderful friend, Morgan Housel, who said, you know, it's really good to save like a pessimist, but invest

like an optimist. And that's sort of my mindset. You know, I don't think anybody on Earth thought there would be a pharmaceutical cure for diabetes five years ago, and the implications to the health system of that in twenty thirty and twenty thirty five are so huge, and it's not impossible to think of that happening for Alzheimer's or Parkinson's, and you know, you could end up with medical deflation and that changes the whole medicaid outlook. And so, you know,

black swans are not always bad. In fact, I would say black swans are evenly distributed. They're just large. In fact, they've actually had a positive skew over the course of history. It's just we remember the bad ones much more. They're much more vivid that good ones tend to play out over a longer period of time. But I would say, you know, I sleep like a baby, waking up every

three hours, crying and scared. But you know, we're substantially fully invested, and we own many companies that are in their second century, and many and a number that are in their third century. Remember Bank of New York was founded by Alexander Hamilton. It's still in the same business, right. That's an amazing, amazing thing. So that focus on durability

does matter a lot in an uncertain time. I sure as hell don't feel safe for owning a piece of paper that's an iou from a guy with a printing press, you know, who can just print pay me back with you know, printing more paper. So I sure like owning businesses. I think of them as inflation protected bonds where the coupon is a little volatility, But you know, the durability of the underlying business is what really matters.

It's not about ferraris. It's about the ability to do what you want when you want right that that's what wealth is. And so helping recast that I think is hugely valuable. So I'll put that in what I'll call a psychology type of book. I would say. Boug Shrevanissan wrote a book called Americana that is a breath taking sort of history of capitalism in the US, one industry at a time, starting with the Mayflower Compact and ending,

you know with this semi the internet. I think by going through railroads and canals, you know, how did these industries get built, who financed them, who were the drivers? What about you know, so that's sort of fascinating for just sort of reminding you of how powerful our model is and how well it is worked for how long. So and then I'll give you maybe a last one.

It's got a terrible title, but I think it's especially good in the world that we live in now, where fear and anger have been monetized, right, so, you know the nature if you want engagement, you need the best way to get people to pay attention is to scare them or make them angry. That really locks them in. And you know, we used to have pretty clumsy tools to do that. Now we have sniper rifles to inject

fear and anger into each person individually. And the result of that, of course, it's bad for the civilization, but it's also very bad for investors. And so there's a book. I can't remember the author, but I can remember the title because it's a terrible title. It's called The Power

of Bad. But I think it's an incredibly useful defense against this tendency to be so convinced that things are getting worse and therefore the world is ending and it's just And it has some very practical recommendations of how to adjust your news intake to sort of be more aware of what is happening that is positive and how to recognize that that power of bad is being inflicted

on us. So that's a good range of three. But I could go we could spend the whole podcast talking about about books and but those would be three off the top of my head.