Bloomberg Audio Studios, Podcasts, radio News. Welcome to Marrindrogs Money, the podcast in which people who know the markets explain the markets. I'm Marior in Sunset Web this week. Marks later, the chairman and chief investment Officer of Slater Investment joins me. We discussed the UK market, how to invest in it and what the government should do to make it a better market. Mark, thank you so much for joining us today.
Very kind of you to come in pleasure. Now you have got three different funds at Slater, right, You've got an income fund, a growth fund and a recovery fund. Now, when we look at these three things, what does it all mean? I want to start by talking about the difference between these funds. What it is that you mean by growth, particularly when if you're investing in the UK, almost everything is what we used to call value, right, So what's growth, what's income? And what do we mean by recovery.
The income part is very simple because it literally is that is a strategy which represents the relatively small part of what we do. That is seeking what we call good and growing income and some level of capital growth at the same time. So that fund pays a pretty significant yield premium to the UK market around five and a half percent versus the high threes for the UK market, and some capital growth.
And that's what we're going to interrupt you immediately to say, so those will be mainly large companies.
No, that's across the market cap spectrum. Something like ninety percent of interesting yield opportunities are outside the foot Sea hundred. So we're looking right across the piece for that strategy. Well, we have about a third back that thereabouts in foot See hundred, but we have a good chunk outside on the growth and recovery side. Both of those funds are
basically our growth strategy. The recovery fund is small and therefore focuses on slightly smaller companies, but they're basically the same strategy and what we refer to as growth and always have done, by the way, so it's our thirtieth year is buying growth cheaply. So we're very much at the intersection of growth and value, whatever those terms mean, because obviously they mean a lot of different things a lot of different people.
Well I always look at that and I think, well, surely everything is value. Is there anything except for value? It might be in the air of beholder. But who on earth would buy a stock if they didn't think it represented good value, So the terms are basically meaningless.
They are, but I would say, if one were to caricature, you would say, you know, some people regard growth as momentum driven, very high multiples, that kind of thing, and they regard value as sort of cheap but utterly hopeless, and in decline that those are the extremes. What we're looking for is decent levels of earnings growth but at a reasonable price. So we're looking to pay a relatively low multiple in relation to the growth threa for the
companies we buy. I would say in the last few years we've had a very different market complexion where suddenly even quite dynamic businesses are priced as if they have no prospects whatsoever, so they're priced on very low multiples. For us, our ballpark has always been somewhere between a ten and fifteen multiple of earnings a pe multiple. In twenty twenty one we were at the upper end of that. We can go up to twenty times on a prospective basis,
but that's not something that happens very often. So in twenty twenty one we were at the upper end of that ten to fifteen range. Typically for a new holding these days were at the bottom of that range or below it. There's a plethora now of single digit multiples where you've got a very good business. So these days I think if growth and value didn't have much meaning in the past, I think now they really have converged in the UK.
In the UK, Lisa, you must have the most spectacular hunting ground in the UK at the moment, you know, is absolutely downed, particularly the foot two two fifty, with very high quality companies with reasonably fast growing earning trading on very low valuations, not quite as low as they were. Admittedly, you know eighteen months ago valuations are even cheaper than they are now. But nonetheless, given what you've just said, this should be the most perfect time for your style.
I agree with you. Yes, there have been little moments here or there where things have been cheaper, you know, the day after the Trust budget markets were obviously cheaper. But if I look at the thirty years I've been doing this professionally, I would say, right now, give or take a few percentage points, yes, it's spectacularly cheap. And the other aspect of it, which is really interesting. And
this is again something that's fairly unique for me. I haven't seen this before to this degree, is the disconnect between public and private market valuations. The private equity players are rubbing their hands with glee, and that's actually been a real problem in the last eighteen months or so. A little bit less so now because there's a slight change in the mood for the better. But you go back a year and boards didn't feel they could resist
a premium. Now, a premium to a really low number isn't very clever, but that's what we were seeing, and a lot of fund managers needed the cash, so they were accepting deals they should never have accepted. You know, go back into last year. I think that that has got a bit better this year.
But it is an extraordinary idea, isn't it, that a privately held company should have evaluation premium to a publicly held company, Because it's sort of upending everything that I ever believed was taught or was told, which is that a publicly listed company, given it to liquidity, should trade
at a premium to a private company. And someone said to me only a few months ago, they talked about the liquidity premium and what they meant was the lack of liquidity premium, and that was an absolutely extraordinary thing.
Yeah, I totally agree, it's not meant to happen, but it's happening here.
Why has it happened?
It's interesting. I mean, if you go back to twenty twenty one, prices were relatively high in a lot of asset classes, including UK med and small cap in some pockets. When rates changed, we fully expected there to be some impact, and particularly we expected it to be amongst high multiple companies.
So the surprise has been that it, yes, it's hit high multiple companies, but it's hit low multiple companies too, And there hasn't been much distinction between companies that have had some kind of problem and some companies which haven't had a problem. So that's a huge surprise. I would say the reasons are partly fear of recession over the last couple of years. What concerns about earnings growth or
the quality of earnings that's been an issue. I think on top of that, you've had the almost doom loop around flows, where outflows create selling, which create poor performance, which create more outflows. There's been an element of that that's a bit better than it was today, but it was definitely a factor in twenty twenty two and twenty twenty three. On top of that, you've got the kind of main year around large cap tech in America that's sucked a lot of money out of pretty well everything else.
On top of that, we had the Trust budget, which I think just at a time where the UK was beginning that the perception of the UK was just beginning to improve. That was obviously a big setback. So lots of different things have happened. It's been the same in Europe to a degree, but I don't think quite as badly.
It feels why we've had more of a discount in the UK. I think so, yeah, but people are noticing, yeah, and it is changing. We're beginning to see We're beginning to see balls take control themselves. We begin to see short rising buybacks where every seems like a very efficient thing to do it at a time like that, and we haven't seen significant buybacks in the UK in the past.
That's right.
And we're also seeing rising m and a rising bids for smaller companies, etc. And possibly maybe the beginning of some inflows back into the UK market or at least the end of the outflows.
I think the flow situation has significantly improved in the industry. There have been one or two months where there's been signs of life, and then you find the next month it's sort of not so good, but the bad months are no longer very bad, so there's a slight improvement there. What's interesting, actually outside the fund data that are bigger flows into passive UK products like mid to fifty indices and things like that. So there's definitely some interest in
the UK now that there wasn't before. We do quite regular investor meetings and lunches and webinars and things like that, and we have found in the last year that attendance has rocketed and pretty well everybody there is very interested in doing something about the UK. They recognize it's cheap, they recognize their underweight, but they're all waiting for a catalyst.
Everyone's sort of waiting for someone else to jump. It's a bit like the sort of penguins in Antarctica, you know, when they're all waiting to do get in the water. So there's a nervousness, but there's a lot of money on the sidelines that could move very quickly, so I think there's a lot more interest the valuation piece. I think when it's interesting when people talk about catalysts, because I think when something is very cheap, you shouldn't be
too worried about a catalyst. It's going to come. Valuation in and of itself is a pretty interesting catalyst. Is the most people are often.
Not prepared to wait, are they. I mean, this is one of the problems with the fund management industry, and we always say that retail investors have this great advantage over institutional investors because they can afford to wait. No one's judging, no one cares. They can buy things that are cheap and consider around and wait with that endlessly wobbling way about catalyst because it doesn't matter.
Yeah, that's true to me. The interesting thing is, I think the smart question would be what is the catalyst, for example, for Nvidia to double again whatever. But for very very cheap companies on low multiples, the risk is low.
I mean you might say in the UK as well, that the big sellers of finished selling, so where we're just waiting, we're sort of plattered. So the pension funds of probably finished selling, the insurance funds of finished selling, they've been selling down their UK takes for years, years and years of practically no home bus at all, in fact, no home busts at all, negative and negative home bust
most of them, so they can't really sell anymore. The defined benefit pension funds have nothing left to sell, so that that negative has effectively gone, and defined contribution pension funds, the assets inside those are rising and they tend to have a little higher allocation to the UK, so that makes a difference, a gradual one, but a difference in terms of weight of money coming to the market. So it's it's as much the negatives have been removed as anything.
Else, very much, and I think a few others have been removed as well. So if you go back two years, the narrative was very much that the UK there was a kind of UK exceptionalism where the UK was extremely bad and a complete outlawer. Even in Europe. That narrative was actually just wrong.
But it was never true in the first Leich just somehow developed well.
I think it was all tied into Brexit, and a lot of the people who were anti Brexit sort of pushed that narrative because it sort of made them feel better but the reality is it wasn't true, and for a couple of years that's gone. That narrative was completely gone because the data for the UK is kind of in the middle of the pack for a European country, So it's not brilliant by the way at all, but it's just not exceptionally bad.
You can't suggest that it's specifically worse than anybody else because of Brexit, all because of any one factor, and you can't. You also can't do the thing of looking around saying, oh, look, the UK is in political koes and everywhere else's stable, because that, of course isn't true either exactly.
So I think we've had a shift in the narrative and the mood around the UK about the general economy, which is significantly positive. It was seen as uninvestable in twenty twenty two and now it's a very big shift to be seen to be investable. Whether people do it or not, it's not the matter, but that's a very big psychological shift. I think. On top of that, as you say, the election, whatever one's preference is, it was boring, and boring is good, so I think that was a positive.
So I think a lot of the pieces of the jigsaw are in place. And the other thing is there's a lot of resilience amongst UK companies. The UK has been in a sort of not a technical recession, but it's kind of felt like a recession for quite a long time, and businesses are used to operating in that environment. Combine that with low valuation, they've taken an awful lot of pain. So of course there are circumstances which could be negative, but I think an awful lot of that is in the price.
Yeah. Someone suggested to me earlier today that one of the reasons that UK companies is so resilient is because management became so much better during COVID. Managers really learned to understand their companies and the dynamics of their companies and every little detail of their companies in a way they wouldn't necessarily have had to at any point pre COVID.
So coming out of COVID, or not out of COVID itself, but out of the pandemic regulations, etc. That changed the way they were able to manage companies made them much more resilient in the following years.
Is that fair or I think it's fair, And I think there's a very significant contrast there between the private and the public sector. You know, I think companies got lean and mean in that period, and I think the public sector did the opposite, which you know, for a whole lot of reasons, but no, I think it's true. I think companies and not just COVID. Also, coming out of COVID was very complicated for a lot of companies,
particularly around supply chain, and it's been tough. They've had an awful lot thrown at them, and they've managed throughout the last few years. Whenever we met companies, with the exception of the worst moments in COVID where people really didn't know what was going on, but outside that extreme moment, when you've met with companies, they weren't complaining about the economy or any of these other factors that one tends to read about. They were just getting on with it.
And that's what companies do. That's one of the things about meeting companies. They tend to be quite positive and they're just getting on with the work they have to do.
Okay, So you've got pleasantly valued, very resilient companies sitting in an environment where what could go wrong mostly has Although I would say there's probably a little political risk in there. We've no adar about the budget in October. They're an awful lot of things there that may look unfriendly to business, unfriendly to growth. In this idea that the UK is now stable place that could be derailed. That could be derailed, So there is political risk.
If you talk to a London they will definitely share that view. They would definitely say that they're very worried about things, but there aren't that many.
There aren't that many of them, but that other people may be worried about capital gains. We may see people selling their UK equities, for example, ahead of the budget to crystallize capital gains in advance of the rate going up.
So the river is there are niggles about it. That's not concerned about the direction of travel, but nonetheless optimistic point of view, We've got a politically stable country with a perfectly reasonable economy, interest rates very likely to come down for that very soon, and most of the world in a rate cutting cycle as well, and great valuations, so it would be entirely reasonable to think that you could see a fairly nice couple of years coming from UK. Smallerment caps in particular.
I think so, and the data is also supportive on that. One can't invest on this basis, but it's interesting historically, when particularly the small cap space has a bad period for one, two or three years, the following years are normally very strong. It's pretty good at bouncing back. So it tends to exaggerate in both directions. So that's what I would expect. Having said that, I didn't expect what
happened in the last two years, so you know. So I'm not putting myself forward as a sort of soothsayer, but I think the facts are very supportive, very supportive.
Okay, let's go back to the problems of the UK market as a whole and a potential catalyst or not. There's been a lot of discussion in the industry and among politics over the last couple of years about what can be done to make the UK market a better place to invest. And if you talk to an international investor, they'll very often tell you that, yeah, it looks fine, but the liquidity isn't there. They can't quite cope with it,
or they worry about stamp duty. They worry about the fact that the UK is one of the highest stamp duties in the world, and they worry about the government not necessarily producing some kind of signal that they support the market. I mean, I felt that the counseling of the brita Ice it was a very bad idea. I don't know what you thought about that, but them should be something that we can do to create that catalyst for the UK market. What do you think there should be?
Well, I think it's necessary. Now I agree with you with the British ISA. I mean, yes, it was messy and complicated in all kinds of issues, but it was a statement of intent and I think that exactly the sortant.
There are much bigger ways that could be done. But I think the first thing is to try and work out what the problem is, because there are a lot of false narratives around the UK market, and I imagine the average politician assumes that these are the kind of basic assumptions are we're bad at taking risk and we're bad at tech, and they look at the foot Sea hundred as if it's representative of the entire UK market, and I think that's wrong. Yes, a few companies have
listed in the States. They typically are actually companies where all of their activities are in the US, so it's not a particularly unusual phenomenon in my view. But the real issue is that underneath the foot Sea hundred it's sick. The patient is sick. It's been hollowed out over the last probably twenty years, but in particular over the last five. You know, the Fledgling Index has lost seventy five percent
of its constituents in the last five years. If you exclude investment companies, which are aren't businesses, the small cap index, it has lost half of its market value, ignoring again investment companies, so it's not going to exist in a few years on.
This is again because people can get money elsewhere. It takes us back to private equity. Equity help waves of private money that can that can if the companies don't need a list because they can get hold of the money earlier, or private equity can take them off because they can buy them out at a premium and management hasn't got the energy left put up a fight.
Yeah, that is the sort of the diagnosis in the sense that you know, there is sickness down in the lower reaches of the market, and it's a problem that in the same way if a tree didn't have roots, it would be a bit of a problem. I think it's also analogous to the housing market. You know, when the housing for the housing market market to succeed at the very top level, ultimately you need health at the very bottom as well. It ripples all the way through.
So I think there's a real issue down in that the lower reaches. I think that the solution is actually very simple. It's a lack of capital. You know, the UK is the only major stock market on Earth that doesn't have around half its ownership in domestic long term capital either pension funds or insurance companies. Used to have half not that long ago, maybe thirty years ago. Now it's down to five percent roughly, and that's unique. Nobody
else does that, nobody, and that is a problem. And basically another way of looking at it is we've had roughly a trillion of outflows in the last few decades in the context of a market that's worth just over two trillion. So it's very significant, and it's for a whole lot of reasons, but a lot of it relates to errors by government and regulators over many, many years. And I'm not a fan of government interference in markets. But when they make a mess, I think they have
to think about whether they put it right. And I think the starting point has to be do we want to stock market at all, because on the current direction of travel, we will not have one in a meaningful sense in five or ten years.
Well, there's an interesting parallel. I was discussing with them on the other day about regional stock markets in the UK and as you know, we used to have so many regional stock markets. We had Aberdeen, done Glasgow, Edinburgh, Leeds, Birmingham, Manchester. I'm sure there are more, and the last one's disappeared in the mid eighties with the Big Bang, But also they gradually withered away because London became the best place to less and their place with the other the biggest company's,
most expensive companies, most interesting companies, et cetera. And the ones that were listed elsewhere just still slowly disappeared. Everything gravitated to London, and there is suggested that this, you know this, this could happen globally as the London comes to New York because Dundee was to London and gradually drifts away. So the question do we want to stop market at all? Is no longer ridiculous.
No, it's not. Well, well, I think the question whether we will have one is a very live question. I think the question is whether we should have one. The answer is very simple. I think it's a straightforward yes, because I mean, you just take a few simple examples. If private equity buys a company, a public company, the day they complete is the last day they pay corporation tax. They don't do it anymore. They loaded with debt, they offset the debt against profit, and that if I were
in government, I'd find that pretty irritating. Also, you've got a lot of disclosure. It is a source of capital. I mean, yes, there are other sources of capital, but it's a source of capital, and it's also a massive provider of wealth and a big contributor to GDP. The city writ large, I think is something like thirteen percent of GDP. It's something like that. It's an enormous number. And you know, seven hundred thousand jobs in the country, in London and outside London are linked to it in some.
Way, and there's a high pad jobs.
Very it's important, and I know, you know it's fashionable for people to bash bankers, but they're not all bankers. You know, they're doing all sorts of things.
So in essence, having deep and liquid capital markets is extremely important to GDP GDP growth overall. I think it's instant and to pretend that it's not just silly.
And also what's interesting to me is labor needs money to fulfill its subjectives. So, for instance, on the Green Agenda, I'm not an expert on this sort of thing, but they've had significantly reduce their ambitions. If we had a thriving stock market, that will be another tool in the
kit for government as well. And what fascinates me is, you know, yes, there's lots of focus at the moment on the rules and you know, whether shareholders should be able to vote on related party transactions or whatever it might be. The rules are kind of I mean, yes, there's work that needs to be done, but they're kind
of irrelevant. And I've pointed this out to some politicians I've met over the last year or so, and you know, I asked them the question, why is it that practically every big fund manager on Earth is camping out in read at the moment. Is it because they like the rules, or is it because they think there's a big pot of cash and they can get their hands on some of it. And it all comes down to cash. If we have large amounts of domestic capital pointed at the
UK market, everything else becomes possible. And the money's there, it just needs to be repurposed.
So are you suggesting that the government direct pension fund to invest in the UK market? Are you suggesting an element of compulsion?
My view is if government is giving tax relief, they have the right to attach strings. I don't like the idea of government telling people where to invest, but I think where they're giving tax relief, people don't have to take the tax relief. You know, if they're giving tax relief, I think then there's a very strong case for setting some rules around that. And it's not as if others don't do it. You know, plenty of countries have done this sort of thing successfully. One of the simplest areas
is ices. You know, isers the original iso the PEP had an obligue you had to invest in the UK. I think it was either fifty or one hundred percent had to be invested in the UK. That's been removed. Why not bring it back. There's two hundred and fifty billion of pet of ices in non UK equity products. That's a lot of money. In the context of our market. I think the pension fund sector is more complex because you've got some of it's in runoff, some of it's not.
So I think one would have to focus on the areas where cash is coming in. But again, if tax relief is being given, I don't think it's unreasonable to set conditions similarly. Within the insurance companies, it's a slightly different thing. We have the Mansion House Compact already with this five percent target, which I think is very low. I think that should be a higher number. I think it should also very explicitly include quoted companies as well.
Ten to fifteen years ago, people used to talk about matching liabilities from a currency perspective. No one ever does that anymore because the US market's done so well in the last ten or fifteen years. Everyone's conditioned by that. Interestingly, those people weren't talking about buying the US ten or
fifteen years ago. It's all backward looking. But I think that there's a strong argument for matching liabilities, and there's also a very strong argument for using the Australian Superannuation Playbook which I think is obvious where these massive funds, these massive pension funds in Australia, they started out where they had to invest all the money in Australia public and private assets, infrastructure, things like that. They became so big they had to branch out, but they still have
a very big proportion in Australia. And interestingly, if you're a trustee of one of those bodies, every year you have to write a report and you have to explain how your investment actions have benefited Australia. And the argument is that it's beneficial to an Australian retiree to be in a country that's working, and if infrastructure is required then it helps them.
It's the financial return. Yeah. No, it sounds a little like finance for oppression. But I'm afraid I rather agree with you. I mean, in fact, we're having a bit of a meeting of miners. I wrote Colin last week about the BRITE. I says, suggesting that instead of abolishing that, you should bolish all the rest and them put the entire twenty thousand a year only into British listed stocks. And then the response to that was very much what
is a stock? What do you mean that bees most of the thirsty one hundred is you know, large percentage of the revenues come from abroad, and what about an investment trust that's not a UK stock etc. And I rather feel that was to completely miss the point, to the point just being to pour money into the UK market, to increase its liquidity, to increase its depth, to benefit the economy as well. It doesn't really matter what's British
and what's not. Totally what matters is that as a UK listed That was my feeling.
I totally agree, because I think the market is under under pressure. Obviously there have to there have to be some thought about the rules and all that. But I think it makes perfect sense that you know, funds investing in the UK, companies which are listed here, investment trusts which have a focus here. You know, all of those things are fine, and maybe they have to be certain thresholds.
But I say no for assaults. No for assaults, no, I think no.
I think to get it done.
I'm with you.
But you know, even if there were thresholds, it wouldn't worry me. The key thing is just to do something. And I actually think one of the benefits of labor is they have no just in their DNA. There's not really an issue in terms of acting mandatory action forcing people to do things, whereas the Conservatives were much more hands off in that sense. I would worry me if they start telling people how they invest their money in a you know.
Very as long as they're inn a tax wrapper.
If there's a tax rapper, I think there's a very strong argument.
Capital controls would be a problem, but things inside tax rappers absolutely not. So fine. Out for a brush and light, we'll call it.
It's fine.
Fine.
I think it's in everyone's interests.
Well, let's see if it's a no brainer in their view. We'll find out. I mean, there's definitely a shift in that in that direction. I think it's well underway already, but we'll find out shortly. Listen, let's move on to slightly more fun stuff and talk about some of the stocks in your portfolios. I know you don't invest by sectors.
You don't necessarily have an answer to this, but do you find that your stock selection is leaving you at the moment with a sectoral bise, A sectoral bise sectual bias. You know what I'm trying to say.
Not right now, not really. We have had that over the years, does happen occasionally, but nowadays most sectors they're not that meaningful in the sense that you know, I mean in the part we're not invested in house builders in any real meaningful sense at the moment. But we have had a couple of periods where we've been very heavily in housebuilders, and they're kind of all the same. You know, there's a very homogeneous sector, but there aren't
many sectors like that. So where we have sector concentration, it tends to be in areas, you know, like support services, which really is a catch all for a whole lot of different types of companies which don't have a lot to do with each other. So nothing not really at the moment, there's not really a sector theme. The companies we own are really in all sorts of different areas, typically with some sort of niche, typically with that you know, an obvious focus, but not not really a sector.
Any interesting recent acquisitions that we can talk about.
I made a ratherprizing investment earlier this year in Glaxo, which is not.
Very any of the things we've been talking about.
But it's on a very low multiple and that's growing around ten percent and everyone hates it and you know, generates cash. It does all the things we like. Every quarter. That's been improvement for now, probably for two years. The management's doing a great job, but no one is interested. So I was very happy to own that business.
Why do you think no one is interested in a business like that, well known, good brand recognition. As you say, growing fast with a multiple dividend.
It takes a long time. We had the same thing with Astroseneka, going back a long way. There was a bid from Pfizer. I think it must be twenty thirteen or fourteen. We own the company at the time, and the bid was defeated and the new chief executive did a brilliant job. And now no one wants to hear a bad word about Astrosenica. And it's on a fantastic rating. It doesn't have any of these sexy weight loss drugs, but it's still on a fantastic rating. And Glack so
I think is in a similar position. I think they're doing all the right things. It's just that there's an element have shown me there's an element of sort of they have to prove it. The other fly annointment is there's litigation around Zantac, which is a concern. I mean, you can't ignore it, but it's massively discounted in my view.
What's the biggest holding in the small cap fund?
The biggest holding.
We've got small growth fund.
I mean, yeah, the growth fund. We've got several holdings around the similar sort of size, but the biggest holding right now is Circo, which it's a mid mid cap company. It's got a fantastic cash generation, it's got a you know, sort of eight nine ten percent free cash flow yield, it's been generating nice steady growth for quite a long time,
good returnal capital, so all the things we like. They're retiring around seven percent parannum of the equity on top of all that, and it's just very prudently managed, you know, not popular, but they just steadily do their thing. So we bought that position around coming out of the COVID pandemic because they did a lot of their they were one of the big COVID beneficiaries, but obviously that revenue was kind of one off in nature and it was
interesting it kind of put people off. But the fact they'd done so well out of COVID people didn't like that because they knew it was going to fall away. So all of our analysis does strip COVID out as if it never had never happened, and the underlying position was very nice, very healthy. So that company we've owned for since that time and it's done really well.
Okay, interesting, and then they recovery fund.
The biggest holding there is a company called Franchise Brands. It has a few activities, but the primary activity is hydraulic hoses, which in certain types of business you need them, and sometimes you need them very quickly. And they own a business called Perte, which is a franchise business but in most countries in Europe and it's a market leader.
They also own metro Rod in the UK, which is a you know, sort of plumbing related business run by Stephen Helmsley, who is the man who built Pizza Express from a three million pound company into a two billion pound company. So I would say he understands the franchise market better than anyone else in this country, and they've
done a great job. We invested in that company for the first time, maybe even ten years ago, it's certainly eight ten years ago, that kind of thing, but they've done a fantastic job, and I expect that company to motor for quite a long time.
Old any of these small silveral gold miners, we've been interested, you know, we've been watching the Gold Prize and also watching the miners and interested in the disconnect between them.
I don't. I looked at one yesterday, actually, but I don't. And one of the challenges, particularly with the smaller ones is costs. Costs moves so quickly in mining, and it's a real challenge. It's incredible how quickly the margin is, you.
Know, eroded.
It happens very fast. So that's a major issue. I mean, you look at things like the price of sulfuric acid. It's so volatile and it can take a business from profit to loss, you know, in a few months. It moves around so much. So no is the short answer.
Okay, so we'll be better off holding gold and silver.
I think normally that that pays. I think where where it's different is at inflection points. So I have in my life. Back in two thousand and two, I made a big investment in a private gold mining company where we're just trying to get as much in terms of gold in the ground as possible with really no intention of mining it, just to sell it to someone else.
Because if the goal and the gold price then was two hundred and fifty three hundred, it went up a great deal over the next few years, and suddenly these assets became viable. So I think at inflection points you can make a lot of money, but once everyone knows the price is high and they know you're in profit, I think it's a tough game.
Well Mark. That brings me neatly to our final question, which we do ask everybody on the podcast, although actually I think I forgot last week. I think I forgot to ask Diana, and Diana, I'm going to telephone you and I ask you if you had to choose between gold bitcoin and you had to hold the one you chose for a decade, which one would it be? Can't be both? No?
I mean, fortunately I don't have this problem in real life, and I would just rather I'd rather hold a business of some kind. But I think I'd go for gold.
I like the doubt.
Oh well, well, there is doubt because I think with bitcoin, I think a lot of the doubts around bitcoin have been addressed, not all of them, but quite a lot of them. You know, it is used a lot by quite a wide range of people. It's institutionally investable.
Now.
An awful lot of family offices and endowments own a little bit of bitcoin, mainly just in case it goes up one hundred times and then if you feel really silly if you don't have it, if everyone.
Else, But that's not a good reason to.
But that's what people do. Fomo is a real phenomenon.
Although I mean, I hold some bitcoin just in case it goes oh lot, by the way, so I'm guilty of this one. But that doesn't make it rational.
No, it isn't rational, but it's well, it's semi rational if if someone's buying a tiny little bit, it's like buying an option like a hedge. Really, so I think people are doing it for that reason. What I don't like about bitcoin is its correlations are all over the place. You know, yes, it correlates to gold and massively exaggerates the movements in gold, but it also correlates to nasdak a lot of the time, and it correlates to one or two other things too, So it's it's a strange beast.
If I had to deliver a return of you know over one hundred percent or two hundred percent, I probably go to bitcoin just because I don't think gold will do that and bitcoin could. But if I had to, if it's a straight choice, I probably would go for God.
It's a straight choice. I'm not putting the restriction mark. Thank you so much for us today.
That was great fun, great pleasure.
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