Jeff Moore is a real estate and stock market investor. We discuss information asymmetry in the capital markets and how to leverage them, the ongoing technological disruption and how it can dramatically improve small and medium sized businesses around the country, and the intangible things that prevent business owners from changing their operating behavior.
Twitter: @ragnarisapirate
Blog: Ragnarisapirate.blogspot.com
Timestamps
01:03 - Thrive ($THRY)
05:55 - Risk/benefits of investing in small cap stocks
08:45 - Information asymmetry and arbitrage
14:18 - Zero fee trading and liquidity in small caps
19:30 - Softwares for SMB’s
23:56 - What’s stopping SMB operators from adopting new technology?
26:59 - Do SaaS companies have a responsibility to educate their potential customers?
32:12 - How accurately do we know the total addressable market for SMB SaaS companies?
34:56 - What are SaaS companies not understanding about their customers?
35:37 - Jeff’s real estate business
39:04 - Blackrock and institutional buying in real estate
44:56 - Interesting stocks over the next two years/ Caveat Emptor stocks
53:10 - What is something Jeff wishes more people knew about?
Intro Music: "Pain is the Essence" remix by @AdiSoundsGood on Twitter
Jeff Moore is a real estate and stock market investor. We discuss information asymmetry in the capital markets and how to leverage them, the ongoing technological disruption and how it can dramatically improve small and medium sized businesses around the country, and the intangible things that prevent business owners from changing their operating behavior.
Twitter: @ragnarisapirate
Blog: Ragnarisapirate.blogspot.com
Timestamps
01:03 - Thrive ($THRY)
05:55 - Risk/benefits of investing in small cap stocks
08:45 - Information asymmetry and arbitrage
14:18 - Zero fee trading and liquidity in small caps
19:30 - Softwares for SMB’s
23:56 - What’s stopping SMB operators from adopting new technology?
26:59 - Do SaaS companies have a responsibility to educate their potential customers?
32:12 - How accurately do we know the total addressable market for SMB SaaS companies?
34:56 - What are SaaS companies not understanding about their customers?
35:37 - Jeff’s real estate business
39:04 - Blackrock and institutional buying in real estate
44:56 - Interesting stocks over the next two years/ Caveat Emptor stocks
53:10 - What is something Jeff wishes more people knew about?
Intro Music: "Pain is the Essence" remix by @AdiSoundsGood on Twitter
You know, it's kind of dangerous if you don't know can do it, but it's not hard work. Because of the, you know, like, you know, the government kind of coming in and being like, oh, we need all these licenses and things. They, they created a shortage, these guys, right. And prices are going up. I mean, you can see what's happening with construction costs. And so that's made the people that have these licenses get up there in age. Cause you have like a huge barrier to entry for you people. And they get very set in their ways. Like a lot of times, like, I mean, I talked to a payer here. Who we were actually willing to pay him more money to paint houses than he generally builds. Right. Right. My next question to him was you sounded great. Can you email with us? And he's like, no, I like it. And I'm like, okay, like we can get you set up with email and teach you how to use it. He goes, no, man. I just don't do that. I go, okay, well, do you want your card back? Because this won't work for us. Jeff, thank you so much for coming in. So I think I wanted to just begin this by describing how I came across your came across you on Twitter and specifically you were describing this one particular company called thrive. And the ticker for that company is thry for anybody that's interested. And since you brought it up and since you've advocated for it on Twitter, I guess just publicly the stock has done incredibly well. And I think what's really interesting is, I mean, it's, it's a small cap stock. They do one or two very particular things. So better than me explaining it. If you could describe sort of, what are the key characteristics of this company that caught your attention and how were you able to see the value in it? When nobody else did. I came across it just like talking with people. I mean, one of my buddies, we're talking about a company called Donnelley financial, which shoes basically a paper proxy printer and they were kind of transitioning to this digital SAS environment for public companies. The old paper business, you know, not a very good business. I mean, we've all seen the office and know about the underground it's, you know, kind of a dying business. Right. And, but the thing is, is there, there's a high growth kind of obvious by that which is their SAS business. And so we were talking and, you know, describe thrive. And so we you know, I, I dug into it because I found the story really interesting and you know, the next day I started buying shares. So the, the, the shin business, that obvious case, the good one is the yellow pages, right? I mean, if you've ever been in a gas station or tell room, you know, maybe sometimes they'll drop them off on your doorstep. Have these yellow pages books and, you know, they, it costs like a dollar 25 cents to make one of those. And they get like$9 and 25 cents or so in revenue from advertisements. And so there's a lot of leverage. And they're, they're creating just a crazy amount of capsules. I just don't absurd one actually, but it is a declining business as declining in the low twenties. But, you know, I think that the net present value of it's more than what the market was assigning to at the time. And the other thing is that, you know, they did a direct listing, so they weren't able to do road shows. You're really talking about what was going on with the company. So, you know, when I was buying my shares, you know, I think my dollar cost average on the common stock, which I only bought shares of now. And we can get into that. But you know, I think my, my, my cost is probably like 11 or 1150 or something. And we just literally, cause no one knew about it and if they did the first thing they saw was yellow pages. Right. And they didn't. Same thing with the debt, but it was obviously needing this really cool small business SAS software. Right. And it's an incredible software package. I genuinely think that is the future of small business software. And you know, as a scheduler, it's it does websites does ads. It aggregates all the data. No Google and, and home advisor, and they're on whatever sites, there's 50 sites or something that they do. But you can go to their investor relations stage and you can hear Joe Walsh, our CEO kind of pitch it and he can do a much, much more interesting job than I can of communicating that. Yeah, I definitely want to get into the software aspect of this business, but you just said that she only have five shares at this point. Well right now, right when I started out, I had a lot more. And so I started buying shares and you know, for me, I got a pretty healthy amount and you can see what happened with the stock. And obviously very well. And at some point in there probably in December at some point, at some point, because I think I started by my chair there around Thanksgiving. You know, I figured out that there were these warrants that. And they weren't publicly traded. Right. So I got a list of the warrant holders from the company, you know, under Delaware law, entitled to get that list of shares. And so I started calling up and doing mailings to the warrant holders and they had received these warrants as part of the Dex media bankruptcy. And I'm like, Hey, you may have these things we think are worthless. I think they might be worth something. I was really transparent with them. I was like, you know, I think that this could do very well, but there is risk in it. And at the time, even the stock was trading in the team. So I was able to get a whole lot of warrants that way. And then, you know, through my broker, we did some other transactions and stuff with some big warranties. So yeah, so my, my play on it right now is the warrants. And the way I wound up with the five shares of stock was because I wanted to do a test run of the warrant conversion into the stock. So I converted 10 wards into five shares of stock, just to understand the process because you know, these things you know, they, they expire in August of 2023. And you know, if this continues dealing well, I don't want to be. Just kind of going around in the dark, not knowing what I'm dealing with. There's potentially a large sum of money going on. So I wanted to understand that process, right? When I first heard about this process of reaching like cold mailing, certain warrant holders, getting information from them, negotiating with them, buying their warrants and then sort of becoming invested in this business in a very indirect way. I was like the fact that such a thing even exists. Really cool. I guess, you know, the common sort of criticism of people that invest or investors in small caps and focusing their time on small caps is that the risk is really just not worth the benefit. What do you have to say about that? I mean, I'm sure there's some way you could share like a Kelly criteria or something on what I'm doing. Right. I'm not smart enough to do that, but, you know, I'm just, you know, I was kinda thinking, okay. Like, I mean, I basically graded the warrants for free because of the, the, the performance of the stock. So that was kind of interesting. So I, I felt like I was kind of playing with house money a little bit, but You know, generally speaking, I think that people saying small caps, it's amazing. This is a really that small company. I mean, at this point, it's, you know, I think a$1.1 billion market cap, you know, 1.8, 1.9 billion enterprise value at the time though, it was, you know, like half a billion or something like that, the market cap and maybe 1.2 and EBS. But I think that people just kind of throwing the baby out with the bath water, so to speak on some of these microcaps, that's what creates the opportunity. And if you're not a hedge fund working with a billion dollars or even a couple of hundred million, you know, and, and, you know, you're just a regular person. You can take advantage of those kind of anomalies in the market where you have some asymmetric upside. I mean, you know, you know, Donnelley financial is an interesting example that we're edge funds. So, you know you know, a guy know that I really liked a lot. Richard Sosa, you know what I mean? He, he, he will happily pick up their straps with dominance and, you know ACFN that's another one that's, you know, probably got a$40 million market cap. I own a little bit of it. But that's a really interesting little business that is a legit business has been a fantastic CEO. And chairman, and I think there's going to be really interesting based on him, but it's just not the size of the larger firms can invest in it. So they get small valuations and as they grow and more people start paying attention and buying in, you know, and you have a constricted demands. So, you know, the price generally reflects that. Same thing with theater when they things up was, you know you know, cost of capital goes down and that's a good stuff. And then people wind up liking a stock at say,$50. Did they didn't like at 10, you know, I think that risks you know, the street club operator, I think people liked that stock a lot more,$50 than they did. A lot of people I know were buying in teams. Right. And it's really counterintuitive because what was the less risky bet? Was it buying it at 50 or was it buying a 15? I, I, you know, granted, you know, at 15 we thought Amazon packages were going to kill us at the time. Right. Right. So maybe there was more risk then, but from a price perspective, it doesn't seem like there was. So I think that's why a lot of that, that that happens. And I think that there's Jason, that people outside. Especially if you're working in small amounts of gasoline. I, I mean, I, I definitely am. I definitely have worked you while that's capital. And I think, I think the other, the other thing I've been thinking about is I actually, the other day I watched this movie trading places. It's like one of my favorite wall street movies. And in the, in the movie, there's a scene when I think Eddie Murphy basically enters the trading floor. And the guy that showed him around is basically like, this is the last bastion of capitalism in America. And this is, you know, the eighties twenty-five years later. We're at this point where stock trading, trading stocks and investing in stocks has become so popular and information has become so easily accessible and it, you know, anybody can access it and turn it into intelligence. And all these analysts are covering all these big companies. The only real companies that are not being covered like that is the smaller companies. And I, I think this is what we're talking about. The asymmetrical arbitrage here. It's like almost like an information arbitrage. If somebody is willing to do the leg. Reach out to investor relations and find that information. And I think that's, what's where I'm really trying to get to is that you and others I've noticed actively reach out to investor relations at these companies that aren't, that well-publicized and you managed to get information, whether that's like a notes in the financial statements, or, I mean, you're really like digging for Bolden and you, and then you end up finding it. So if you could just speak a little bit about your approach there, you know, any tips you have for people that are maybe new to the space and how you sort of. Information collection as part of your strategy. Yeah. So I think the first thing is don't be afraid to reach out to people. You know, people, they, they like to talk to people, you know, I mean, we're, we're social creatures, right. And especially if you're, you're asking them questions about something that they spend a lot of their time. You know you know, and I always approach this from the, the, the side of, you know, you don't want anything that's here. It's not public. Right. That's the last thing that you ever want to get, because if you do, then you can't make money on this. Well, if, when you could, but you would probably want it to go into jail, which no one wants. Right. Right. So if you do wind up with that information, I would highly suggest. But you know, there's a really good book called sleep in bed. I'm sure it's on Amazon maybe and I books or something like that. But I, I read that when I was probably 22 or something, maybe 20, I don't know. And it just really resonated with, and it's almost like a trigger that you're doing this stuff, you know, especially when you're reading you know, the thing official documents of the company, like a 10 K or think you are a, a or an S one or throw them whatever. Other abbreviations you weren't, but there's a lot of information in there that you can get and that you'll, you'll start to notice patterns and things there that you should start asking questions. Right. And a lot of people don't read them and it seems like the people that do read those filings automatically assume that it doesn't do much good because everybody else that they know is reading. So they're thinking the market should be efficient and yet the spare. But I think that there's a little bit of an art in the interpretation of that. You know, looking at the incentive structure of the company, I think is very important. You know, thrive. One of the things that I really like about the warrants is that if you look at the options for the executives, a very significant amount of them are going to be exercised in the year that surrounds. So six months on each side that Warren's exercise. So the insiders are very, very incentivized for personal net worth perspective to have the stock up high in, in August of 2023. So, you know, just finding something like that in the proxy statement, right? You don't have to read the whole thing. You can start noticing, okay, this is where the information is. And then you can kind of fill in some of the gaps that's, you know, looking at the subsequent events and it saying to you, that's something valuable, for example, the last. And this is something that no data aggregators is going to have. So if you're looking at the financials of this company on Morningstar or Google or yogic, the answer, whatever you use until I can get out of this there, the amount of cash is not going to be correct on there, right? Because you're looking at financial statements for March, but from the end of March, but in there, you'll see that on April 30th or so somebody exercised a million warrants, which injected the company with something like$414 million. Right. So the company actually has, you know, a lot more cash on their balance sheet that everyone thinks, or they use to pay down their debt so much more well capitalized company. So, you know, you can talk to investor relations about that, say, Hey, you know, can you give any color? Right? Because at the end of the day, you're looking at documents, they're going to take you maybe an hour or two to get. But they're trying to sum up the work of several thousand people that they've been working on, you know, anywhere from 40 to 80 hours a week for the past year, there's such an information age search. They can get clarity on that. Certainly. So don't be afraid to reach out to me, talk to people on splitter. I mean, this is. Right. Exactly. No. So, so for context, just, just so I understand myself the 10 Q you're saying has a section on to subsequent events, which is events that have occurred since the financial statements were released but were not included in the financial statements. And then by looking at the material, got to say that again, sorry. And they had to be relatively material. So for example, like, you know, if they accelerated their debt pay down by like a million bucks, that's, that's not going to matter. Exercising of, you know, state tent you know, probably 10% of the warrants that were out there. They put 15, 14 or$15 million a week. That's kind of a big deal. So they've got to disclose that right. That's very cool. That's a, yeah. It's like, these are the things you learn in class. So then you're either learning school or something of your, like how do I apply this to make myself money? So this is okay. This is really interesting. Okay. Last trading question. I really want to get into the software aspect of this aspect of thrive and just generally running a small business or a small to medium sized business. You know, platforms like Robin hood now I guess to an extent E-Trade and TD Ameritrade, they've created zero fee trading and. What I've seen that's really interesting in Robin hood is they really publicize the small to medium cap businesses because they tend to fluctuate a lot on an intraday basis. And so you'll see like the small cap businesses that go up like 40, 50% or a hundred percent in a day. And that automatically attracts it's like, you know, the fleas to a honey, or like they're still honey or whatever. And a lot of people jump into it. In fact, they ended up making some of these stocks almost more liquid. As somebody that invests in some of these types of companies and things like that, is this sort of good for you or bad for you? Or how do you see this? Does this even affect your thinking at all? Or where do you, where do you stand on that? Yeah, I don't know if this is necessarily good or bad. I mean, I think that more people looking at information on the marketplace generally makes the market more efficient. That's one of the reasons that I think it's important to talk about information that maybe misunderstood, right. Is because having officially valued markets that's right. And in my mind, this is just going to make things more volatile, right? You know, you may have more room on the outside. You may have more room on the downside with risk exposure. Right. But that can also create opportunities where again, the baby gets thrown out with the bathwater. And I think he'd been seeing that a little bit with market fluctuations with you know, ECS being just the thing that everybody starts investing. Right. You know, and when the animal spirits come out, it can make for their. Very broad overreactions. A good example of that. And you know, March and April of last year, like we COVID, it, the last thing that you wanted to be in was real estate, right? Everyone was convinced that real estate was going to go down. And in hindsight that it's obviously not what happened. I mean, it's kind of a partial, it's certainly not residential. And there was this little company called stake and capital. Right. And their common stock was, was very compelling. I mean, I, I was buying probably a dollar 20 a share and I averaged up on it. My concerts would have been two bucks. I can't really remember, but they were, they were Reed. That was in a lot of these indexes. Right. As the indexes were selling off from where they were such a small company, their stock was beaten down to. Half a book value or so actually maybe a quarter of book value is something absurd like that. They had a pretty good capital structure on their balance sheet. Like they didn't have like big debt, really like Manhattan bridge capital. Does I really dislike how their debt debt is structured and it's taken capital had issue bonds, right. There were also traded. And so you could buy these baby bonds that were the first thing of the capitalist. For, you know,$12 on a 25 car. And so your yield on that was something like 14 or 15%. Right. And these were hard money loans on, on, on like residential properties. Right. And so there was very little risk in them unless, you know, COVID actually killed all of us and everybody was going to go bankrupt. At which point it was like, we'll just tear up your paper, but there's nothing else really matters. You know, so, you know, the, these ETFs with these large swings, right. Partly because of Robin hood investors going out of the REITs and stuff you know, creating an opportunity there, right? So, you know, you can look at the price and they they've obviously recovered. In fact, the addition of hundreds of millions, of dollars, more of these bonds since then at attractive prices. So I think there's just, it's not necessarily good nor bad. It's just different. And you need to be able to adjust. You know, the same way with, you know, how, you know you know, community banks seems to go public, you know, they were mutuals and stuff. It'd be neutralization process and stuff. Like that's not really much of a play anymore. Whereas it used to happen all the time in the eighties. And you know, it was just the market changed. So just being nimble with that you know, it's just kind of fascinating how things go in and out. Yeah. I mean, you know, there's multiple examples of that. Another good example of why there's some interesting opportunities units, right. That was a company that was traded on the NASDAQ and the company D listed and it totally think the shares. Right. I mean, you can, you can pull up that chart from late 2019 and see what happened with the share price. Absolutely created the company actually got sued over the D the D listing. And so from where a lot of people weren't able to buy the stock anymore. They can only sell it. Right. And then there are all these funds that were forced sellers of it. So it created an opportunity with, with, with some of these situations that you're describing. And so our ironically now that they've relisted and the stocks, you know gone up considerably, but I mean, it got down to like 50 cents a share during COVID, which was frankly stupid. You, there was, you could not have leased all the stores and put the tile on the floor. For what you can buy that company for in March and April last year it just couldn't have happened. And I think part of that was because of the listing and, and kind of the the, the structure that rather than some of these other firms are set up, especially with, with the way we're in debt. Right, right. Dang. That's a so interesting. So basically of these laggards that very casually dropped to the bottom of the NASDAQ, and then they eventually D-list and then all these hedge funds, they have whatever bylaws and rules and things like that, where they cannot buy over the counter or whatever. And then boom, they sell out tank. Somebody like, you know, capitalist comes in, somebody that sees opportunity buys in and does really well. That's sick. I definitely wanted to go back to a comment you made earlier when you were saying that thrive is the future of software for S and BS. Just explain that more. Well, it may not, but I happen to think that I'm placing a bet on that. And, you know, from where I, in the words, I'm. So I may be biased, but having seen the software and, you know, seeing the uses of it with people I'm fairly confident. And you've got a great sales people from the yellow pages business where they already have these relationships. I think that's going to help them grow. But, you know, I think one of the problems with the small businesses that you. Are either so inefficient that you can't be efficient because you can't afford to be, or you're trying to be so efficient with certain things that you're creating efficiency. Right. You know, for example, like the, you know, if you got an electrician, right, he's got a bunch of different journey, you know, sometimes he has to go out to the job site. You know, and that's, you know, generally he gets hot, you know,$80 an hour. You know, it's good money and I'm sure in New York it's multiples of that. But a lot of times you, you have these guys that winds up doing administrative tasks, right. That you can generally hire out for a lot less money than the$5 now. And so, as a result, they don't have time to really think about stuff. And I think the best thing they could ever do would be to just kind of walk away from things for maybe. And just make it a suit. I, I need to use XYZ software, just pick one. It doesn't matter the job, or it can be fried. It can be, you know, whatever else. It doesn't really matter. Just pick one of them and that'll make your life easier right now. I think you should use the rod because it it's frankly got the most robust offers. Right. And it's very easy to use, especially if you Our time. Right. Is very easy to roll out. I like to refer to it as being more bruised. So, you know, it's just a good software that can help scale a business. You know what I mean? People think that, oh, I need a website. And then they wanted to spending weeks trying to figure out the, and he wants to be the piece of shit because they don't know. Well, you know what for like, you know, a hundred bucks a month or something I can take care of that for you. And it can make your website wonderful very quickly. And it gets all the information consistent on every single website. You know, it helps you with customer. It just helps you in so many different ways. I mean, even billing, you know, every week with my business, you know, we're, we're paying contractors. I probably mail it out. Maybe 15 checks a week, but there's probably a good six contractors that need to come to my house to pick up their checks. Right. And that's because they're trying to make payroll and we've been trying to be like, guys, you need to get caught up enough to where you don't have to do this because what happens is that master like electrician or plumber, you should be billing 80 bucks an hour. He's billing$0 an hour to go off the jobs. His guys get more inefficient because of the boss abandon there, come to my house, pick up the check, go to my bank, to cash it, go back to the job site, arching his bank to put the money. And then he has to write his checks for payroll and all that. I mean, he's just killed three hours of his time for something that could have been done for free. Right. You know, that's a problem that a lot of these guys have to take care of that. I mean, they they've done, it's a low fee. Processing platform for payments. I don't think the market is assigning any value right now. But you know, you can do any sneaky transfer. I think the cap on the fee is$10. You know, you can, you can transfer 50,000 bucks. It cost you 10 bucks and money vineyard, how that data, the next day, that's something that would really help a lot of small businesses just get more efficient. And there's also a paper. I can't think of how many times in the past year. We've had contractors talk to us and my controller had to pull every single check that we had written to them. And, you know, we can do that. Cause we've got co-constructing QuickBooks talking, it's the click of a button, you know, real quick. And we just, you know, here's your sheet, you know, and yeah. Yeah. They don't, they're not set up to do that. Yeah. It definitely sounds like you're you're, you're sort of the. Like an early adopter of some, of some sort of software for us SMBs. When you look at other SMB operators, do you think the reason they don't adopt new technologies, do you think that's a psychological reason? Like, they're almost like, no, I don't see value in it. I don't think I want to either maybe to learning curve and they're like, I don't want to learn it, or is it a financial reason? And they're like, it's going to end up being too expensive. It's going to be month over month. Like you were saying, it's a hundred dollars for this.$50 for this. And then there's a fee. Every time I get a payment process, what's, what's stopping them from just really diving into these new technologies. I think it's mostly psychological. And I think that any reason they come up with is just a way to try to rationalize the decision they've already made. People get uncomfortable with new things, especially if they're old, right? I mean, if you're a master electrician or a master plumber, master HBS, You're generally older, right. Because, you know, I don't know about other states, but I know we can stop that process. I mean, you can become a doctor in less time than it would take you to become a licensed like HVC program. Interesting, truly licensed. Everyone says that they got their journey in, right. It takes two years to get, they say they're licensed. Yeah. You technically have a journey of the license, but that doesn't mean you can't actually install stuff unless some master plumber or so got we'll sign off on the work that you did. And then it takes a lot of time in like thought to do that. Which says something about construction costs, right? I mean, it's, it's, it's very much a governmental problem because you know, like the, the electrical license licensing tests, right. When my well, my uncles. He was supposed to design electrical service for like a 250 unit trailer park. Right. And he's like, I don't even know why the hell I'm having to do this. He was like, the most cyber want to do is swap out, handles in a house. Right. Which like anyone can do. I mean, I literally, if you and I would FaceTime, I could walk you through the process for dealing with that. Right. You know, it's kind of dangerous if you don't know can do it, but it's not hard work. Because of the, you know, like, you know, the government kind of coming in and being like, oh, we need all these licenses and things. They, they created a shortage, these guys, right. And prices are going up. I mean, you can see what's happening with construction costs. And so that's made the people that have these licenses get up there in age. Cause you have like a huge barrier to entry for you people. And they get very set in their ways. Like a lot of times, like, I mean, I talked to a payer here. Who we were actually willing to pay him more money to paint houses than he generally builds. Right. Right. My next question to him was you sounded great. Can you email with us? And he's like, no, I like it. And I'm like, okay, like we can get you set up with email and teach you how to use it. He goes, no, man. I just don't do that. I go, okay, well, do you want your card back? Because this won't work for us. And you said, okay. And he said his car back. He literally threw away. Tens of thousands of dollars of business over the next six months because you wouldn't email. And it was, I think that's just a psychological thing, you know, you get set in your ways and you think, oh, I've been farming for 35 years. I don't need that. Right. Do you think the onus on Changing the behavior of the sort of old school, small business owners is, does the onus fall on them or does the onus also to an extent fall on the companies themselves like the software businesses, like they need to do a better job of sort of matriculating into the culture and changing people's behaviors and re-educating them and explaining to them here's the value add? Like, like you're saying here, you use this software and you will literally make. X amount, X, thousands of amounts of dollars more this year, I feel like it just seems like such an obvious thing. Like if I was running a business, why wouldn't I go out there door to door and be like, look, you need to do this. And even if it costs me something upfront, it pay me off it pay out much. Or I get like a customer for the rest of the, for the rest of their life or whatever. So why, why isn't that happening? Okay. I'm going to, I'm going to send this much in, back on you. What's your name? So my background, I'm actually a student right now. I'm a graduate student, but up until recently I was working as an accountant. I'm a CPA. Okay. Right. And I asked that. You work with numbers all the time, right? So you and me, you inherently know this. Right? Right. Other people there's a lot of people, they don't know it. If you actually, I mean, I have a spreadsheet that I set up, actually explain the amount of time that somebody wastes by coming to pick up a check from my house and the amount of money it costs them a year. If you're billing 80 bucks an hour, it's going to cost you$10,000 a year to come to my house and pick up. Hmm, just trips to home Depot, like our software set up. We can totally save the contractors from ever having to go to home Depot for anything, if they just do it right. Just save them hundreds of hours a year. Right. And literally they would make another$25,000, which, you know what a lot of them still do go to home Depot because it's just what they're doing. Knowing something and feeling is right. Are two different things. Right. Okay. I think that's a lot of it. I think with the small business software space, let's say, and we need to explain this to them and show it to you. And yeah, that's a fair point. I think you're going to get people signed up for the software by doing it right. But you're also going to have a lot of churn because people are going to wind up not using, I mean, I knew an EPC contractor that was trying to switch from jobber to. And he got frustrated and said he was going to cancel thrive because they couldn't dump enough in this context from jobber into fried that it was London and he just totally misunderstood the email that thrives in. They could actually do it. He just didn't understand it. And so he was like, oh shit, I'm just going to, I'm sick of this. So ultimately, I don't think that the onus is on either party. I think it's just going to happen. That's right. I mean, what you saw corporations with HubSpot and Salesforce over the past 10 years, we were the first doctors, right. And the small business is going to kind of come in behind. Right. Ultimately, I think what's going to happen is all the boomers that have these businesses are going to die off and they're going to be replaced with, you know, millennials and gen X and gen Z or whoever they're going to just naturally be more software base for everything because. You know, I mean, I was, you know, I don't know how I was 23 when I got my first like real Android smartphone. Right. I got the first one, the HDC one or whatever it was that came out. And you know, so I was able to adopt that. But you know, if you got that phone when you were 40, it's going to be a lot harder to understand how to use that. Right. And so think about like my nephew, who, one of my favorite memories of, as we were driving to a place eat and he had his mom's iPad and he was probably two holding it and he saw a picture. And if the screen wasn't locked. So he was flipping it from portrait to landscape mode, just watching the screen rotate, you know, and then the picture. And he did that for five minutes. It was fascinating to watch. You can see them learning. And so he's going to be a lot more apt to use that software say then, is that right? She's just more intuitive. So yeah, I mean, literally I think it's just a generational thing where people will die off and eventually accepted. I'm sure. You know, it kind of as a corollary. Yeah. You know, I'm sure that there were people who went indoor plumbing came about, you know, was, was adopted in, you know, St. Eastern Kentucky in the early 19 hundreds. Right. I'm sure that there were people that still were saying, you know what, that indoor plumbing that's great for you. It's just kind of gross that you're willing to take a shit next to your bedroom though. I'm going to go out to my liquor. Yeah. I see what you say. Yeah. Yeah. I don't like the wheels. I like to ride horses sort of, you can make, you can make, you can make any sort of compromise. Yeah. People would have said, I can feel with the horses, thinking this machine, whatever I've seen, these things blow up. You didn't have that with, with electric car. You know, I mean, people, you know, every time it's Tesla catches on fire, you know, which almost never happens. They're like, oh, Tesla's a fraud. It's, you know, blah, blah, blah, this, this, this, this electric technology, this, when you know, who cares about that every once in a while they happen. And ultimately Teslas are sacred in a, you know, an internal combustion engine car, right? This is crazy people. People are always scared to death of change and it's, it's sad for society. Right. Yeah, I think you make a great point. I think this idea that the status quo of human behavior is you need a, we're almost always looking for a reason not to adapt and not to change. And the second we get any reason that resembles something that, you know, could apply, we just take, you know, go off with it and take advantage of it. Yeah, the reason I keep drilling the this, this aspect of you're saying, which is that people are not willing to change. I wonder, is this whatever it is that you're describing, has that been baked into the total addressable market numbers? In HubSpot's thinking or in the analyst's thinking when they value a company like HubSpot they must say that, you know, HubSpot's market is whatever this large, if they have X percent of it, but are they considering the fact that generation over generation, we're going to unlock this entirely new tech savvy millennial business owner. That's going to inherit their dad or granddad's business. What I do know though, is you can see the results of say service pipe, right? Which sort of spite needs repeating for a very, very different customer than than thrive. But Godel, which is very large HPC from Allen, like Nevada it's multi-state. But there are very fascinating. If you CPR go check one of their ads. And, you know, see their, their, their, their current president CEO talk about service for them. It's amazing. But I can not imagine the cultural shift that he had to do with the company to actually implement that. But he was able to hugely grow the business because of service type. And because they, they probably learned how to use it effectively, but I would be willing to bet they had to fire a lot of his installers because one thing I've known. Is like in business, whenever you implement like a new system like this, it's oftentimes just fire everyone and start over. That is tracking people that, that were on the old system. Here's a good example of that. See my girlfriend, she works at a hospital here in town and they changed the software system at the hospital. Yeah. And there was a revolt on her floor with like the nursing staff. There were probably five, five nurses. They quit because they would rather quit than learn how to use the software system. It was actually easier for them to use. Right. But they quit. And then also lately they went and got a job at a different hospital where they had to learn some different software. So the end result was the exact same. They were still having to learn a new software, but they just were like, no, I'm not going to do it here. Right. So there can be a cultural shift in human behavior. You get locked into a certain setup. And, you know, I think when you also can find a voice that value getting more efficient all the time, you know, And are okay with some change, as long as they understand, you're not changing just to change, you're changing because there's an actual purpose. You need to really bring to those people and value them because they're there, they're harder to come by then than you would think. Okay. So beyond, beyond all this that we just talked about, is there anything else that you think the, the HubSpots of the world that thrives with the world that they're not understanding about their customers? Is there something that they really just don't understand that you wish they did? I don't know. You know, there's a whole lot of people working in those companies you know, and their internal thinking may be different than, you know, kind of their, their, their, their public thinking too. I, I, there's such an information asymmetry on what I think they think versus what they think and what other people think. I think I just, you know, that's fair. Okay. That's fair. Okay. So I did want to touch on the real estate. What exactly do you do in real estate? That's sort of your nine to five, right? So we buy houses. That are frankly shit holes fall down early. Yeah, it's kind of funny. I said that once and, you know, community activists that kind of really angry with me because she was like, you know, these are people's homes in their neighborhoods. And I was like, well, what do you think I should call them? Because when I walk into these places, they're literally ready to fall down. There's no plumbing and there's a hole in the roof, you know, like they're literally condensed, so what should I call? And she kind of just shut up and walked on. Right. But I cannot express them. These places are literally falling down in most of the cases. So we come in, you know, we get building permits and all that, and we literally reconstruct them while they're still sitting. And you know, the way that the particular totally, you totally reconstruct them, you tear them down and no, no, no, no. We, we, we do while they're still standing. So it's like we take out a wall, put a wall back, right. And kind of go around the house and do that. Sometimes it would actually probably have been smarter to just tear the whole thing down and start over. But that's just not what we do. We, we, we don't do tear downs. I've maybe seen three, seen three houses were actually thought they needed to be torn down. But the part that's probably more so on me, it's, it's more of a that's on it's going, would be an economic decision on my part. Part of it's just like, no, there's good stuff here. We need to use it. So yeah, so, so we kind of rebuild them while they're still standing, you know, bring them up to all new clothes. You know, we, we, you know, I feel like we do a nicer job on this recognition. I mean, we use hardwood, you know, nail down bamboo flooring, you know, we put tile and we put, you know, dovetailed, solid wood cabinets and butcher block countertop, stainless steel appliances. You know, we insulate the hell out of houses. You know, we use sprayed them almost everywhere. You know, We use, we try to get our ceiling insulation value to our 50, right. Which code is our 38. You know, we, we try to do a lot of stuff like that. Tankless hot water heaters, lots of things like that. And then we ultimately keep them as rentals indefinitely. Okay. Just kind of the play. No, no, no sort of term dated the future, like seven, eight years. Sell it. Just keep it indefinitely. Rented out, increase rents year over year. And it's like a nice ROI in the long term. Yeah, I think so. I mean, you know, everything's done, you know, we're, we're fine holding all this stuff. I mean, there is an opportunity to bond that I'm involved with it. We'll probably have some sort of liquidity event or something that's in the next eight years since we started up 10, two years ago. But you know, We'll see what the undersurface structure looks like and all that. I mean, that may change, but you know, I mean, generally speaking, it's, it's an end up in hole and a lot of that depends like in the market, I'm in, there's a green belt, you know, there's lots of infill being encouraged and like, literally you cannot build, there's a service boundary. You cannot build anything outside of it. And so the city officials here are wondering what the price, housing going, you know, parallel. If rents are going up and, you know, people can't afford their houses as well. It's a government made problem. They would have to let people build in the past 20 years. So you get some really weird things where, you know, shotgun houses that are in what was previously viewed as you know, impoverished and, you know, for the Aboriginal environments desirable part of town, you know are, are going for lots of money now. It, it, it's a truly weird market distortion that our government street. That seems to be the case everywhere. I mean, like I'm in California right now, Northern California. The only thing that we talk about in relation to real estate is the fact that we're not building anything new. So actually on that topic, like what's your take on. This recent news that BlackRock and these other hedge funds are buying vast amounts of residential real estate. Is that generally, I mean, I guess what, what's your take before I even try to try to bias you? I mean, doing this every day, I've already got my biases. I'm your. I don't know what to make of it. I mean I can't tell if it's a little overplayed because I've, I was under the impression that, and like six years ago, BlackRock was the largest residential landlord in America. So why is it that all of a sudden in 2021 it's become, it's become like a much bigger issue. I wonder if it's been exasperated by the fact that we don't build anything new. And so now people are really worried that they've taken the existing supply and they've just sort of cornered the markets. But even now I'm like what percentage. Of the residential home market, do they really own, right? Like, is it even a material amount? I know that the largest, but what does that mean? They could just, I actually do not know the exact number there. Well, it also gets down to demographics, right. Because you know, if you go out to, you know, Mel stir Lincoln's hockey, right. Sorry to go out there. You know, there's no scale. They need to be able to, you know, Warren buffet, you know, a great financial crisis. He said, if he can Bible, what was it? A million or a hundred thousand single family residential. So you'd write a check for right now, but he couldn't do it because he couldn't put the deal together, you know? It's kind of funny because people think that you can just snap your fingers in nearby 10,000 houses. Like, yeah. I mean, I guess you could, if you found somebody that owns 10,000 houses, but collar those deals together, it takes work. This is not like selling a normal business. Right. If you were going to be selling, you know, a software business or a steel mill or something, there's one asset there, you know, and maybe even some multi, you know, location place, here's 10 assets. You know, and an infrastructure people to make that path, but for single family housing to transfer you can't, you generally can't just transfer the LLC. At least if you're smart and bold to do that, that's actually stupid to do, right? Because you need to run title work on every single asset. Right. You're literally trying to go against these institutions and you know, common law that's been set up forever. How are you going to get insurance on 10,000 individual single family house? Right. I mean, I'm sure there's a company out there. That'll do it. I don't know who they are though. I know every time we buy a house, you know, we have an automation in, in one of our software's called Monday, actually it's Republic. And we you know, we, we get inserts. I mean, you still, they, they changed drastically for municipality means power, right in Lexington. Right. We have a merged county. Right with the city, right. It's in Kentucky. We're one of the, the two counties that are like that. So we got one water plant. We've got one, you know, electric place, one gas. But if you go to counties out to Anderson county, Depending on where you live, you might have city water, private water, you might have Delta gas, you might pay you. You may, you know that it's a good a Frankfurt and there's four. You've got to deal with for a lot of stuff where you do have electrical service refunds, that utilities, but it goes through the local plant work. Right? So you have to know all these like very geographic geographically base things, right in, in Kentucky, we've got 120 here. Right. And then however many cities on top of that. So it changes even more drastically, right. In a place like Kentucky. So that makes a real hardship, you know, BlackRock and these guys, you know, they're, they're probably focused on, you know, population centers. So like Las Vegas someplace in Florida, I don't know. I mean, Orlando, Miami and stuff, but I mean, to my knowledge, they haven't really started doing anything in license that, which is the second biggest city of attack. I don't know, nor do I care if they're doing well, but I would think that they would go to Ruleville before Lexington. And then, you know, I think that the play will be, you know, to, you know, smaller landlords, you know, ultimately I think that the play with a lot of real estate is to basically be an aggregator of this stuff and then sell it to a company at some point, like BlackRock, that may be the exit for a lot of people. Oh, interesting. Okay. But you know, I mean, you can see that. Well, any industry is highly fragmented. You know, there's always an inquiry, you know, in Peter, which is book one up on wall street. I think he talked about a funeral home operator did that highly fragmented industry, that they just kept buying them out. You know, you're starting to see that with HVHC businesses and then, you know, self storage is doing that a little bit. You know, I think that there's some car dealerships there to do in that pawn shops. You, there was a guy here that put together a chain of 15 pawn shops and he sold it in the first half, which was brilliant. Right. Because if he was sold to a private investor here, he might've got like, you know, Or he wouldn't have even gotten a multiple of EBITDA. Right. He would have gotten like, here's the value of your inventory? And then I'll give you three months worth upon it. Right, right. Right. But when he goes to burst gas, you can all of a sudden sell it for, you know, five times EBITDA or something. And then, you know, maybe you get some stock on top of that. Maybe some options for their performance-based and it's highly creative for the pawn shop. Right. So, you know, I think maybe we'll see that with real estate. My market. I'm not so worried about BlackRock. And I mean, if they do come in here, I think it would be a long time for now when they can actually get scale. I mean, that's why you do multifamily. That's why all of the big replays are commercial multi-family because you can deploy a hundred million bucks. Right? Right. Yeah. No, that, that the, the thing that sort of. Business acquisition framework that you just described is exactly how it works in the accounting business. You know, accounting firms NAB have a bunch of small clients here and their tax clients audit clients, and then a bigger firm, not necessarily a big four, but like like a regional firm will come in and acquire them. And then, yeah, it's like inbuilt, distribution, employer clients. It's really, I never, I never sort of broken it up and thought about it, you know, in real estate and things. And that's really interesting. So I did want to get to like a fan service. As you look out into the next year or two years, three years what sector, or you may be spending a lot of time looking at in terms of the stock market. And then specifically, if you could name, you know, one or two stocks that you're extremely excited about, you know aside from thrive, if there's any, anything other than Well, I'm glad, I'm glad you gave that caveat because thrive is by far my largest hole. If anyone follows me on Twitter, I'm like, no, no, no. I know. Yeah. So right now, I I just bought some warrants on, I guess, Friday of of the ticker symbols, Lego leg. And that's an interesting steel spack. I think the wards have compelling upside, you know, I don't know what's going to happen with steel, right? It's 1700 or something right now for roll, which is three times what it was, you know, probably a year ago. I'm not smart to understand this. But I do think the warrants are compelling. You know, they have, they've got unlimited upside, so you gotta work fast, but I think that's an interesting one. You know, especially if the deal stays elevated, I mean, that'll just be a slam dunk. But I've been, I've been looking a lot at warrants lately. I own some get-rich or warrants. You know, it seems like there's two sides on this where like a wall street bets and, you know, square box and whatever. So to think this is an amazing company and stuff. And you've got these other people that are like, no, this company shit it's, you know, the old management team was awful. They diluted shareholders and they're not going to do it numbers. And I'm kind of in the middle where I'm like, guys, I, I don't know, like, I really don't know what to the way this would go. I'd be kind of surprised that they hit their numbers, but right. At least where I've I warrants that. Right. I was paying, you know, a little bit north of a dollar for. I just thought it was compelling that, you know, and, and maybe it will go to zero. Maybe it won't. I was really impressed that they were able to put together you know, what was in essence after the warrants and stuff, and he'd call it like, you know, quarter to a half billion dollar placement, right? For a company that originally had, you know, a very, very small market cap. I was really impressed and they got that deal done and managed to get with a 60,$70 million in debt on it. I thought that was interesting, but. I, I think that there's a lot of black and white here with not only get occur, but just a lot of other things and people, I think that there's a lot more value to be put in the kind of the gray area. Right. Another example of a company that I really, really liked because the valuation is called expo resources and the ticker for that ESCE it's financials are not public is a caveat into our stock right now. And it was bankrupt several years ago. It was a massive bankruptcy. They had something like a billion dollars in debt them. It just, it was a disaster, but right now I think the common stock is actually really attractive because you can email Tyler at the company as soon as you buy a share. And I just needed a screenshot on my broker's statement, gave him, given that he gave me an ex access to their share file. And I find her financials very compelling. Right now they're getting something like 80% of their their production is natural gas when he's oil and, you know, anyone can look up, what's been going on with natural gas, right. And so they do some hedging and stuff. And, and you know, I think that at some point their financials will wind up being made public on the over-the-counter webs. There, you know, the last conference call, there were probably five of us that were on there, you know, trying to get lime into it. And they seem to be interested in that at this point. But why wouldn't they, why wouldn't they publicize their financial statements? Yeah. So it kind of goes back to like the thrive dealers or the tile shop listing. Right. It's very expensive to be an sec reporting company. Right. I mean, for a lot of these small micro-cap companies, it makes it's crazy. Right? Because your audit costs well, first off, getting an audit from just being an over the counter Kilby. That doesn't mean sec roll file. To getting sec level. If you just call an auditor and say, Hey, I need a regular audit. They go, oh, okay. Yeah, we can do that. And they can say, I didn't want this ready for the agency. They go, whoa, we don't know about that. And then you can't find a way to do it. And so if you can't find anyone to do it and you've got to go to a big firm and they start charging them, the ask for it, right. So your audit expenses just go insane. It's such a distraction. It takes so much time to deal with. And then when they're just dealing with the sec is not exactly. You know, in, in, you know, putting together all these 10 Ks and stuff that these hundred page documents that have to be right, or, you know, you're facing penalties and all this other stuff. Yeah. So he didn't want to deal with that after the bankruptcy in Fairfax, note three and some other large well-known arms. Basically controlling distance. So, you know, as an oil and gas, but I think that's kind of compelling because it's keeping any of this ESG stuff from making them do something stupid, like off your assets, really cheap or just, you know, stop producing hydrocarbons. So they, when they came out of bankruptcy, they w they said that they would supply shareholders with all the information through a share file. It would basically the SMC quality. They just didn't want to have to file with the sec because of the expense and the time it, but they have, I mean, you can go look at the pre-bankruptcy SCC documents and kind of see some of the assets that they had and what they were doing with their strategy, which was quite interesting to look at. And, you know, then you can start working through the stuff after that and see some interesting things, but it was purely just a monetary thing. And so now that somebody got, well, they got accused of out of bankruptcy, but now that somebody registered some shares and now there's some sheriffs trading around. You know, they're starting to think, oh, we'll leave. We ship with these on the, over the counter site, because more liquidity is always given more information out there helps, you know, attention for the company. And it's just good for officially value in the company. You know, they, you know, it's good for everybody. So, you know, because right now we've got a Robin hood account. You can't buy the shares, right. Because it's the over the counter, but, you know, T America. My dad bought some shares and they sent him a very nasty letter being like, you know, we're going to let you do this, but we don't like you bought these shares because it's copy on in-store and there's so much risk, you know, no one knows. You know, and let's just wait TD Ameritrade, the brokerage sent your dad that that, yeah. Yeah, because I trust the data need to buy some of it. So I was like, Hey, do you ever do that? And he's like, yeah, they did not like that. I did that. So it's probably a matter of time before you can't buy it. I mean, people have trouble buying these copy out in for stocks. You know, on a lot of their just creates more price efficiency. Right. And I think that. You know, the next five to 10 years, I think there's going to be a really interesting play where if you just email the company, you know, and you're not scared to do it to get their financials, right. At the caveats or if you're a shareholder here and title and bylaws to get, I think that there's going to be a lot of money where you can buy a lot of these shares. And especially if you're a cheap broker where you can buy these things and don't have much liquidity and then you can kind of gadfly the company into making them public. And then all of a sudden. The market has the information is actually valued them appropriately with right. You know, then that's great. I mean, in this environment, why should there be an oil and gas player that's trading for probably less than half of its liquidation value? Right. It makes no sense. You know, especially with a dollar in the test, six months, something like that. So I don't know commodities. Right. I don't get that, but I do know that at three 50 natural gas, right. Excellent. Certainly seems very interesting, especially because they keep the letter. Right. And that's something that literally no one else knows about because they probably have an email to the company to get the names. So, wow. I feel like yeah, you just gave me a lesson 1 0 1 caveat emptor yeah. And it sounds like there's a triggering event that comes in the future at some point when they do publicize their financials and then boom, not only do you have liquidity on the price, you also have. Whatever far more publicity than boom, like the stock just continues to go up. And so just to clarify the acts, the financials that you had access to by emailing them, those are not audited. Those are unaudited financials. No, they, they have an audit. It's just, it's it's just not like an audit for the SMC. Right? Got it. Okay. Got it. Got it. Got it. Got it. It's not frankly, this audit would probably be very close to sec level. I mean, I, I have the utmost. I see, I have the, I had the Atlas space in, in their financials for oil and gas. Right. Okay. Gotcha. Okay. Okay, cool. So, you know, maybe to wrap up this interview, it's been fantastic. We like to wrap it up by asking you a question I'll ask you this question, which is what is something that you wish more people knew about and it can be literally about anything. Oh information asymmetries, right? I think that a lot of human interactions would be a lot better. If you thought about information asymmetries, it seems like, you know, for investing, right. We were talking about that with, you know, the same case, you know, you're, you're gaining a very quick summation of something that thousands of people have been putting their work into for the past year. Right. And you're making a snap judgment on that, but also just in an interpersonal relationships. I think you're going to see that this is something that. And not good at and continually try to work on, I mean, even, you know, with my girlfriend, right. You know, just assume the other person or party, right. Isn't coming from a bad place. And maybe you misinterpreted something and maybe, you know what they said, they had seen something and, you know, said it in reaction to something that didn't have that, that happened, that you didn't know. Right. I just think that a lot of confrontations. Could be avoided if everybody just kind of thought everybody was coming from a good place to try to get more information for the background. Right. Because I think generally speaking, people are acting in a very rational method. It's just, it may seem irrational with the information that you have. That's a, that's a great lesson and I I'm totally with you on this, like information asymmetry is not something I've ever really thought about because he spent all my time, at least in the context of the stock market, I spend all my time studying these big companies and yeah. I feel like you've basically with the big companies you've hit symmetry. You don't really see this arbitrage opportunity by asking for this or asking for that. But I definitely wanna spend more time in the future, looking at these small cap companies and seeing like, w w where can I just use it for my own curiosity? And if I don't end up investing is like, where can I email them and find out something that I just did not know before. And so, yeah, I guess all that to say, thank you for coming on. I learned a lot. I hope whoever's listening to this, you know, gain something new. And yeah. Thank you, Jeff. Yeah. Well, thanks for having me on and by the way the last episode with the the lady that had the health tech and stuff, conversation, I love that if you're listening to this, give that one up. Yeah. That's the digital health episode with CME who is an executive director of Novartis. So she has like this great body of knowledge and experience in the, in that field. It won't be the last episode when yours releases. I'm sure there'll be like probably two or three episodes between hers and yours, but, but yes, definitely.