Episode #260: Joel Greenblatt, Gotham Asset Management, “Nine Out Of Ten Families In The Top Fifth Of The Income Chain Have Retirement Savings, Nine In Ten In The Bottom Fifth Have None”
Guest: Joel Greenblatt is the Managing Principal and Co-Chief Investment Officer of Gotham Asset Management, a successor to Gotham Capital, focused on a long/short valuation-based investment philosophy. Since 1996 he has been a professor on the adjunct faculty of Columbia Business School where he teaches “Value and Special Situation Investing.” He’s published some excellent books along the way, including his most recent, Common Sense: The Investor’s Guide to Equality, Opportunity, and Growth.
Date Recorded: 10/14/2020
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Summary: In episode 260, we welcome our guest, Joel Greenblatt, Co-Chief Investment Officer of Gotham Asset Management. In today’s episode we’re talking about real proposals for real problems.
We dig into topics that touch everyone in our society. We get into long-term savings, (by the way, nearly half of all working age families have zero retirement savings beyond what they might expect from social security) and discuss a novel tweak to the model that might deliver critical retirement savings for people who may not be in a position to save enough for retirement. We touch on our education system, where the core issues stem from, and how education might be able to be improved for all. We talk about the advantages of being open to immigration, and how a movement of alternative certification might spur an ecosystem that can improve how the workforce prepares for jobs and offer more direct ways of demonstrating technical know-how.
Make sure you listen all the way to the end, as Joel covers some high level thoughts about how he thinks about value investing and his perspective on markets right now.
All this and more in episode 260 with Gotham Asset Management’s Joel Greenblatt.
Links from the Episode:
- 0:40 – Sponsor: OurCrowd
- 1:33 – Intro
- 2:14 – Welcome to our guest, Joel Greenblatt
- 2:24 – Common Sense: The Investor’s Guide to Equality, Opportunity, and Growth (Greenblatt)
- 4:12 – Teaching long-term compounding to 8thgraders in Harlem
- 7:35 – Possible solutions to long-term investing from Australia
- 12:59 – Can we add personal financial education in schools
- 15:29 – Fixing education on the whole
- 20:54 – Defining characteristics of charter schools
- 23:14 – Argument against charter schools
- 25:22 – How 2020 is going to change the digital landscape
- 30:49 – Income-sharing education models
- 31:56 – Alternative solution to the minimum wage problem
- 39:36 – State of immigration in the US and whether it’s still the place to be
- 48:03 – Joel’s thoughts on markets and state of investing in 2020
- 51:39 – Thoughts on value investing
- 56:27 – Any major shifts in investing opinion over the last 10 years
- 58:17 – Most memorable investment
- 1:00:24 – Learn more about Joel: Common Sense, Invest5.com
Transcript of Episode 260:
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Meb: Welcome, friends. We got a magical show for you today. Our guest is an industry titan, running Gotham Asset Management, focused on a long-short valuation-based investment philosophy. And since 1996, he’s also been a professor on the adjunct faculty of Columbia Business School where he teaches value in special situation investing. He’s published some books along the way. You may have read a few, including his most recent, “Common Sense: The Investor’s Guide to Equality, Opportunity, and Growth.”
In today’s episode, we’re talking about real proposals for real problems. We dig into topics that touch everyone in our society. We get into long-term savings, which, by the way, nearly half of all working-age families in the U.S. have zero. We discuss the novel tweak to the model that might deliver critical savings for people that don’t have any. We touch on the education system, where the core issues stem from and how it might be able to be improved for all. We talk about the advantages of being open to immigration and then move on to how a movement of alternative certification might spur an ecosystem that can improve how the workforce prepares for jobs and offer more direct ways of demonstrating technical know-how. Make sure you listen all the way to the end as our guest covers some high-level thoughts about how he thinks about value investing and his perspective on markets right now. Please enjoy this great episode with Gotham Asset Management’s Joel Greenblatt. Joel, welcome to the show.
Joel: Thank you. Good to be here.
Meb: So you’ve written a few books. You have a new book out, we have it here, “Common Sense: The investor’s Guide to Equality, Opportunity, and Growth.” This is a bit of a departure for you. Joel, what was the inspiration for putting pen to paper again on a little bit of a different topic?
Joel: Well, I always thought that long-term investors, even value investors, but long-term investors have a different way of looking at things. So there are a lot of issues happen to come to the forefront of the pandemic, though I’ve been writing this book for three years, that maybe I thought that a long-term investor might bring something to the table. There are certain problems with capitalism and inequality that have come to the forefront. And, you know, I haven’t seen many of them taken on with sort of a longer-term horizon, meaning thinking about investing now and getting a longer-term payoff later. And so these are areas in the economy, whether it’s education, or living wages, or immigration, or things that I’ve seen, banking or retirement savings, that I thought that, you know, a perspective, another perspective from a long-term investor might be helpful and I enjoy writing and I hoped it would start a discussion by bringing up other ways to look at these problems.
Meb: Good. We got an hour and we’re gonna solve all the world’s problems within that hour. The beauty of this, listeners, and you got to check out the book, is that, you know, so much in our world of Twitter, on TV, you hear what we describe as people just complaining about the problems. They always talk about the diagnosis part, they rant endlessly about the Fed, or the government, or this policy, or this is broken without offering any solutions. And Joel talks a lot about a lot of potential solutions in this book. And we’re gonna touch on as many as we can in this podcast, but definitely check out the book for a longer description. And you can knock it out at an afternoon at the beach like I did.
Why don’t we get started in Harlem? You’ve been a long-time money manager across numerous decades. You’ve been a professor and taught classes on security analysis, but I thought a good starting point might be some of the lessons and descriptions of coursework that you were thinking about trying to convey as some of the most important lessons in all of investing and finance, and we’ll use this as a lead into a couple of the topics. What was the topic with that classroom? You talked about such a beautiful example of long-term compounding, and deposits, and savings.
Joel: You know, I’ve taught over two decades at Columbia, MBAs, and I was asked to teach some ninth-graders from Harlem and I had just actually given a talk to a bunch of doctors, orthopaedic surgeons. A friend of mine’s an orthopaedic surgeon and leads a group, and I had given a talk for about a half an hour, explaining the stock market. And first question out was, you know, “Market was up 1% yesterday, should I get in?” And, “Oil was down 1% yesterday, should I get out?” And my perception of my speech was that I had just crashed and burned and the doctors didn’t understand anything I would say. And then a few days later I was asked to teach a course to a bunch of ninth-graders. And I had failed with the educated doctors and ninth-graders, you know, obviously didn’t have as many degrees and I didn’t wanna fail with them.
So one of the things I did was I went in the first day and on their notebooks, I put an example on the first page of their notebook of compounding. And in the example, you start at age 19 with $2,000, put in $2,000 a year for 7 years until you’re age 26, you earn 10% a year. Or the other choice is you start at age 26 and put in $2,000 a year for 40 years. And the example showed that the people who started at 19 put in 7 payments of $2,000, never put in another nickel, but they started at age 19, finished at age 26, by age 65, they had earned more money, over $930,000, by age 65. And the people who started age 26, just 7 years later, put in 40 payments, they ended up with less than $900,000. So it showed the importance of getting started early. And, you know, if you’re teaching ninth-graders, you have a chance to do that. My MBAs are 27 already. So it’s not that they should start saving as early as possible, it’s just that compound interest isn’t intuitive. You really have to look at the numbers. That was lesson number one for my students in ninth grade, start early.
Meb: I was giving a talk in Ireland last year, pre-crisis, and gave a similar example where I was talking to college grads. And I said, “Look, you guys are getting ready to go to graduation or spring break. Equivalent, you’re gonna head down to Ibiza, maybe the med, spend $2,000, or you could put that in a savings account and invest it.” And how hard is it to have that, sort of, trade-off where you can go backpacking and stay in a hostel where that $2,000, by the time you retire, is probably gonna be worth $200,000? And to think through that when you’re young and the challenges of not having any money is so tough for so many people. Now, my conclusion was actually to go to Ibiza because then you’ll have a lifetime of memories, but this trade-off, if we’ve learned so much about investing and behavioural inputs and incentives, really drives everything around us. And so you gave an example, is you started talking about social security and another benefit of taking a step back and say, “Look, we’re wiping the slate clean. If we could do that, who would we emulate?” And that took you across the pond to Australia. Could you maybe talk a little bit about some possible solutions to thinking about long-term investing and retirement?
Joel: So big picture, if you earn $10 or $12 an hour, about 40% of hourly workers earn something like that or less, you end up with about $9,000 a year in social security. That’s a real problem because nearly half of working-age families don’t have any retirement savings beyond that. All the [inaudible 00:08:53.334] social security, $9,000 a year doesn’t go very far as you might guess. The median family between age 32 and 61 has about $5,000 in retirement savings. That’s just…not $5,000 a year, that’s $5,000. The average working-age, low-income black, Hispanic, or non-college graduate have no retirement savings. And then here’s another statistic that’s just frightening is 9 out of 10 families in the top 5th of the income chain have retirement savings, 9 in 10 in the bottom 5th have none. This is a real problem. Social security, if you’re at the lower end, but $10 or $12 isn’t the lowest end, but it’s the low end, ends up with $9,000 in social security.
In Australia, what they do is they let you save. They take 9% off the top, moving up to 12% in a few years and it goes into a savings account and people can earn higher returns than what you get in social security. If that doesn’t work out well for you either because you started late, in other words, this program only started in the ’90s, so people haven’t accumulated enough to really retire on. They have another program that supplements whatever you do or earn on your own. So over time, over, you know, 20, 30, 40 years, your savings may well exceed social security. If they don’t, we could do something like Australia has where we have a supplemental system where you are guaranteed at least what you would have gotten in the Australian system.
Now, what I suggest is that’s never gonna happen. People love their social security and that program is never gonna be changed. We’ll have to make some tweaks to keep it solvent, but we will. We’ll make those tweaks, but it’s not very generous for the lowest end. And what I suggest is when you’re starting out work or you’re a low earner, you don’t have much money to save, but you’re the person who should be able to take advantage of compounding, yet you don’t have a lot of money when you get started. So how can we give you money to take advantage of all that compounding time that you do have? We’re blowing it. As a nation, we’re blowing it. We’re not saving, these people don’t have 401(k)s. They don’t have enough money. They have to spend money just to live.
So what I suggest is that our social security caps, the highest payment is about $137,700. Why is that? It’s because the social security system was set up to, sort of, match whatever you put in is, sort of, what you get out. So you put more in, you get more out, but we cap how much you can get out of it. And so we cap contributions. Now, if we simply raise taxes on the people above $137,000 where we stop collecting social security, that’s just like raising taxes and people will be calling out for that money in other places. So what I suggest in the book is that we do charge you for retirement savings above $137,000. We keep taxing you, the social security payments, but you don’t get to keep it all. If you’re a high earner, above $137,000, you get to keep like 80% of it and it’s tax-advantage.
Twenty per cent goes to the 401(k)-like accounts for lower earners, for young people so that they can take advantage of compounding. Because of, as we’re aware, the inequality, that’s a lot of money for those people that can come from the high earners. So it’s not a raise of taxes, but it is saying, “All right. We’ll give you some tax benefits of the 80 cents that you have left. We’re gonna take 20% off the top of anything you contribute above $137,000,” which is the max right now, and we’re gonna give it to the younger people and the lower earners. And we can take advantage of compounding. It’s like the greatest free lunch we have right now, young people starting to compound early, but they don’t have the money. So we should give it to them.
Meb: Yeah. You know, it’s funny, you talk to any of our friends in Australia, and I have yet to meet someone who is not just absolutely in love with their system. And the funny thing is you talk to most people, you say, “Look, we’re gonna take out 10% of your paycheck.” And they’ll pull their hair and gnash their teeth, say, “Oh, my God. You know, that’s…” But people adjust so immediately to the money they have the spend. We often talk about real estate and say, “Look, the big reason real estate ends up being a reasonable investment for most people is that it’s along the same lines. It’s what’s forcing you to save and invest and it’s money you’d just spend otherwise. I wonder if there’s some combination system that allows people the ability to have that compounding of decades. We’ve tried to talk about some private market solutions on the podcast in the past, but the biggest challenge is always that if you’re not locked in and you have the ability to sell, so many people will, you know, they either through emotions or life events that happen, won’t give it the time to compound, but it seems like your idea is a reasonable one.
One of the challenges with personal finance investing, in general, that I think contributes a lot to the wealth and income gap in our country is an education gap. I have a quick question first and then we’ll get broadly to education. The one that I whine a lot about on this show is we don’t teach any form of personal finance in schools. You do at the university level, but I don’t remember ever having a class on money, or personal finance, or wealth. And even then it was taught in a way that I thought was it would have like a stock-picking contest or something. Is that something that you think is an achievable goal or is it even a positive benefit that something like 12% of schools in the country teach any form of personal finance or do you see that as a challenge? You know, a lot of people or critics will say that it only works at point of sale. Any general thoughts?
Joel: Yeah. I think we should have much more personal finance, particularly understanding the basic concepts of saving and investing. You know, what most adults struggle with as soon as they get out and earn some money, no knows what to do with it. Everyone is pretty ignorant. So, yeah, I think it’s important. I mean, I had some of that when I went to middle school and high school, but it was more along the lines of what you suggested, which is like a stock-picking contest, which pretty much teaches these absolute wrong lessons about short-term investing and, you know, making money quickly and not actually knowing what you’re doing. It really teaches speculation, not knowing what you’re doing. You know, it’s like a Robin Hood-type education. So I think it’s very important. I think it really depends what’s being taught. I think it should be easier than finding a qualified physics teacher to teach people, to teach basic finance, but it’s very important to do, it just has to be the right material and has to teach the right lessons.
Meb: Yeah. I agree. I mean, if you think about the average 17-year-olds, a bowl of soup of hormones and emotions and equipping them with many life decisions like taking on hundreds of thousand dollars of debt to go to university is so challenging if you don’t have any background. And the suggestion we make is always to frame it in terms of wealth or money, freedom and happiness, rather than personal finance, which sounds so boring, like balancing a chequebook. But hopefully, there’s a private market solution too. We talk a lot about someone could be doing the Rosetta Stone of investing, not gonna be me, but I’m hopeful. You have grander ambitions. There’s the challenge that you talk a lot about and have been involved with for many years that is not just investing education about money, but the entire system of education. Talk to me a little bit about what you guys have been up to and your perspective there.
Joel: Sure. Well, you know, it starts out that we got a big problem. If you live in one of the top 50 urban centres and you’re a black, or Hispanic, or low-income, any of those, your chance of graduating college is 1 out of 11. And we know that college graduates earn 70% more than high school graduates and high school graduates earn 30% more than dropouts. So 1 out of 11’s not a good number. Ten out of 11, the system is failing. I’ve been involved for many years with charter schools because the way our system is set up is if you don’t have money…well, if you do have money or any amount of money, you move to a place where they have good public schools or you send your child to a private school. So you have a choice. If you’re living in a neighbourhood and you have any means at all to move out of that neighbour to a better school, you can do it. That’s how our system works.
So for those who don’t have means, the way things are set up, they’re stuck in the worst schools because everybody else moved out and they don’t have any other choices. So the idea behind the charter school movement was that to give independent operators an ability to set up schools, the vast majority are not-for-profit, you get in by lottery so that if you’re in a school district that doesn’t have good schools, you have another choice. You can apply to or many charter schools and hopefully you’ll win a lottery to get into one. Not all of them are good. Some of them are good. I was lucky enough with my business partner, John Petrie, to find a woman named Eva Moskowitz to open a place called The Success Charter Network.
We started with one school, but we took a business head to it and we said, “Look, we’ll run out of the top 1% of teachers. You know, there’s a lot of one-off good schools. You can put a lot of resources in, get the best teachers, and have a good product.” But we said, “Well, we only care about replicability. Can we set up a good school and then replicate it?” So that means making basically average teachers really good, giving them the resources and the support to be excellent teachers, and having the system set up so that it works well for the students.
And so today Success has…it’s run by a woman named Eva Moskowitz who is a brilliant woman. And we have 46 schools, 20,000 students. The vast majority, close to 90% are low-income minority students. If you took all 20,000 as a group…they’re all in New York City, these schools. If you took the 20,000 as a group, they outperform the wealthiest districts in New York. That means includes Scarsdale, Great Neck, all the wealthy students. They’d be number one. And this is with low-income minority kids. So that’s kind of interesting.
And then in the book, I talk about a district school that’s great. I found a principal who runs a school where 99% of the kids…one of the lowest income neighbourhoods in Brooklyn, 99% of the kids pass the English exam, state English exam last year…I mean, math exam last year, 94% passed the state English exam. But I just gave you the stats for the kids with disabilities. Ninety-nine per cent of the kids with disabilities passed the math test, 94% with disabilities passed the English test. English language learners, 90% passed the English test. So their English language learners, 90% pass the English test. In the district schools, other district schools, the average is 9% pass. So 10 times better.
So he just retired, but the school was run by a principal named Jack Spatola who’s probably the best principal in the state, is my guess. But what he shows is with the right types of supports, kids of all background, including kids with disabilities, kids who are currently homeless, kids who are English language learners, I gave you the stats for the charter schools, those kids outperform all the wealthy school districts. And my point really was that with the right supports, all the kids can do it. And I thought that was an amazing fact. It says that 10 out of 11 aren’t making it through college but they all can do it with the right supports. What can we do with that information? What can we do for those 10, 11? Because it’s not for lack of ability. They can almost all of them do it. What can we do with that information?
And we could try to change the system, and I think we should keep trying, but, you know, kindergarten through university is a trillion-dollar a year industry. Very hard to change it with just philanthropy. It’s like a little drop in the bucket, you know, throw a billion here, a billion there. It’s really not gonna be much of a change in the system. And there’s a lot of entrenched interest in the system. So I’m all for trying to change it, I’m for making more charter schools, but charter schools are only 7%. Not all of them are good, you know, of all the schools. So how can we make a bigger change and how can we do it now? And how can we maybe do…I gave a talk in my class at Columbia back when Tiger Woods was, you know, at the top of his game. And I said, “How do you beat Tiger Woods?” And the answer was, “Don’t play him at golf.” And that’s where I was going in here, how do you take care of these 10 out of 11 who are totally capable but not making it in our current system? And so it’s, don’t play him at golf. How can we do an end-run around the current system?
Meb: For those who aren’t as familiar with charter schools, what do you say is the defining characteristic that…I mean, because the statistics are nearly impossible to argue with, right? I was reading through the book and in my head thinking, “Why would anyone be against this?” What are the defining, kind of big muscle movements? Is it teacher autonomy? Is it resources? Is it curriculum? What is the big foundation with why these students become so successful?
Joel: Well, we have a number of advantages as a charter school. Number one, the parents chose to come. So you have probably more engaged parents. Because we’re not structured, we’re not unionized, and we don’t have certain other constraints, the kids spend 30% more time in school. That’s a big advantage. We can keep the teachers that we wanna keep and we can let go of the teachers we don’t wanna keep. One of the stats I gave in the book is when we opened our first school, there’s a lot of reasons why we had to start with one school. Now there’s 46 at the Success Network. And we have standard, 250 kids. There’s a long story to that. But the bottom line is we had two grades in our first school, kindergarten and first grade. We had 13 teachers. After the first year, because we were just new, we weren’t giving the teachers good support, we probably didn’t hire very well, Eva had to let go of 4 of those 13 teachers. You know, probably not most of their fault, probably if we had good support maybe we could have kept two or three of those four that we let go. But the four we let go in one school was more than all of New York City let go that year from 1700 schools with 55,000 tenured teachers. We let go more teachers that year than the tenured teachers let go in 2006.
Meb: I have a very dear friend who’s a principal in a public school and he consistently says, “You just can’t fire teachers. It’s impossible.” He’s like, “We have amazing teachers, but we have some that are just not motivated, not interested.” He’s like, “It’s literally impossible to fire them.”
Joel: Well, it’s improved since then, by the way, it’s improved since then. And I don’t wanna get into the argument, but just to put some numbers on it, you know, I think there were little over 20 let go in the whole system out of 55,000 last year, but it’s less than 1 out of 2,000. That means 1,999 out of 2,000 are doing a good job and that’s probably not true in any field.
Meb: So two questions, and they’re kind of the same question asked differently. One is you have the evidence, what’s stopping this from just kind of multiplying across the country? And second is what are the entrenched powers? What are the critics saying that, you know, is the argument against this being the norm rather than a rarity?
Joel: It’s hard to understand the other side. I think the best argument they make is that parents without a lot of means don’t have a choice right now in the current system. The parents who are savvy without means maybe are choosing the charter schools, you know, the good charter schools, draining the district schools of those good savvy parents. So you would have to argue, and I go through, you know, those kinds of arguments, but you would have to argue that everyone should have a choice of where their kids go to school, except parents without means. Because if you say, “Oh, we shouldn’t have charter schools because savvier parents without means can still be savvy enough to find a district with a better school. They’ll pull it out of the worst district and at least move to someplace they can afford that it has a better school.” So they are choosing.
Parents with means pull their kids out and move, actually literally move. So to say that now we created an opportunity for kids who don’t have a better opportunity, they’re stuck in a failing district school and they are the only ones that shouldn’t have a choice seems unfair. There’ve been plenty of studies which I show that it doesn’t harm the district school. And I believe those studies because it creates more competition, to have competition in the neighbourhood makes the school better. And, you know, I could see that working and we could argue the point back and forth. I’m for giving everyone choice. I’m for giving everyone choice. I think it’s as simple as that. And if you don’t have a choice, this is another choice for you. No one’s forcing you to go, but if we’re creating a good school, I think everyone should have a choice.
Meb: Well, you know, 2020 happened and all of a sudden we’re seeing some pretty massive tectonic shifts in the landscape of education. Certainly, the technological side has been advancing probably a whole decade in this year alone, although we still have two months left. My God, 2020 is never gonna end. One can only be hopeful, in my mind, that the ability to use technology to amplify the winning models, much like the free market and capitalism does, but also the best teachers to where, a scenario in the future, maybe 5, 10 years from now, you do have the best teachers that can through software and other be able to educate across a much larger landscape than maybe prohibited by physical. But any general thoughts on how 2020 has impacted, kind of, the digital landscape or this equation between charter schools versus status quo?
Joel: Well, I think it eventually could help, you know, what I suggest in the book as the end-run around the current system because, like I said, it’s a trillion-dollar system. It’s gonna be very hard to change. Ten out of 11 kids are…you know, a few come from a top-50 urban centre are not making it through college under the current system. What can you do for them? And I think there’s a lot of things that may be more accepted that I suggest in the book, but something I described as alternative certification and an example you might think of is, let’s say in the HR department, Microsoft is looking for people. And what I suggest is in lieu of a college degree, Microsoft should set a standard of what they will accept in lieu of a college degree to hire someone in that department.
So what tests, or courses, or certificates can someone get for Microsoft to think that we will consider you for a high-paying job in our HR department, or our accounting department, or you pick? And so what I suggest, and there are all kinds of tests, you know, Imbellus together with McKinsey started game-based tests, you know, supposedly testing decision-making ability and critical thinking skills. There’s simple literacy tests. There’s, you know, simple math tests, but there are also other more interesting tests that can be passed. But what tests do you have to pass to get it to the HR department in Microsoft or what courses or what certificates? And I’m not suggesting that Microsoft make tests or administer tests, all I’m suggesting is that they set a standard, this test, existing test, this existing certificate course, this online course, that if you do well in it, we will consider you for a good-paying job.
All right? And what I suggest is capitalism works, that once there’s a buyer…and I go through a lot of examples, but once there’s a buyer for someone to pass these courses or tests, then a whole ecosystem, I am thinking, would develop to help pass those tests. And that could be online resources, that could be tutoring resources, that could be created for for-profit, not-for-profit. There’s no government involvement necessary, there’s no government standards here. Microsoft, or Google, or Amazon, or JP Morgan said, “Hey. To get a job in this department, if you take this course, pass this test, get this certificate, we will consider you in lieu of a college degree.” If you’re disadvantaged and don’t have an education to go take that course or test, I would assume there’ll be prerequisite courses set up so that you can eventually build up to taking that test or course. So there’ll be, you know, courses that fall beneath the course that qualifies you to get those jobs.
Google’s already set up, created six-month certificates for three technical areas. But I’m talking about something much broader. So that’s great. And you can imagine a computer programmer, most of these places don’t really care that you have a college degree or not, they care about your technical skills. And there’s places where you can go to a three-month boot camp to go get them. But I think that could be set much broader. And I’m not suggesting that Google make tests and I’m not suggesting Microsoft make tests. I’m not suggesting they give tests. All they need to do, and it has to be these leading companies, they set standards. If you pass this test, course, or certificate, we will consider you. And then the ecosystem will develop.
And I go through a lot of detail in the book of how that’s happened in Africa, you know, for cell phone companies, and a lot…and I talk about Clay Christianson and how disruption works, you know, and how the Apple computer, the little $2,000 Apple computer disrupted a $200,000 mini-computer. And it iterates over time and gets better. And that’s what I think this…I would say it’s a poor man’s diploma, you know, passing these tests or getting the certificate, but I think it will iterate over time. And these companies are great at looking at data to decide what works and they’ll look up what standards should they set for these people? And then I think we can shortcircuit some of what’s failing in the current system for those 10 out of 11 kids.
Meb: Yeah. You know, it’s interesting. I don’t think I know where any of our employees work at my company with the one exception…or where they went…excuse me. Where they work. I hope I know where they work. Where they went to university with the exception of college basketball rivalries. Like, the only reason I know where half of them win is because they beat Virginia a couple of years ago in the tournament. And that’s the only reason it came out. But, you know, it’s interesting, the world seems to be shifting pretty quickly from part of the credentialing of these universities to, as you mentioned, and Jamie Diamond, this like skill-based rather than degree-based. Any thoughts on Lambda School or any of the income-sharing agreements that are starting to proliferate in places like South America and Europe where essentially they’ll train you in this coursework? And the first application seems to be a software development, coding, you know, don’t charge upfront, but take a percentage of your salary for a few years and it’s capped. Do you think that’s a good model? Or if not, why?
Joel: I think that’s one model that could be helpful. I think that works best for technical, very technical skills. And I think that’s one area that should be explored. You know, I know someone who started a business like that. And there were all kinds of problems with it, but I think it should be explored. Maybe there’ll be a model that works well for that. And I think it’s great that it’s being tried.
Meb: I love the explanation of it. We’ve seen some in sports and we’ve seen some with…there’s even one in the Midwest doing it for manufacturing skills. I’m blanking on the name. Maybe it was Edley. I can’t remember. Anyway. All right. I wanna touch on a couple more. There’s another topic that you talk about that seems to garner quite a bit of emotions on both sides, and that’s this discussion of minimum wage. You have somewhat of an alternative solution for this. I’d love to hear what it is.
Joel: You know, we know that over the last 20 years, globalization and technology has taken a lot of the high-paying manufacturing jobs. That’s been a big problem. And so very hard to earn a lot of money to replace those manufacturing jobs. On the other hand, in 1900, 40% of us worked on farms. Now it’s less than 2%. Disruption always happens. You can argue that it’s happening a lot faster now. Of course, the long-term solution is education and job training. A lot of people don’t have time. Can’t really do that. And you could argue that if you’re willing to work, we should be able to provide you, in our system, a living wage. Most people consider that at least $15 to $20 an hour, something along those lines. The problem with minimum wage is that if your skillset only contributes to a business $8 an hour, very hard to force employers to pay you $15 to $20 an hour.
So we have a great program already. It’s our third biggest social welfare program. It’s called the Earned Income Tax Credit that supplements. If you’re willing to work, the government gives you extra money. It’s mostly for workers with kids. In 2018, which is the numbers I used in the book, it was $68 billion that we spend on it. Third biggest social welfare program that we have, and it’s a great program. It takes 6 million kids out of childhood poverty. Does a lot of great things. The problem would be if you wanted to expand that so that everyone who’s willing to work earns $15 to $20, it works out to about a trillion dollars a year that it would cost us, which is more than $68 billion. Needless to say, about 15 times more. So looking at it as a long-term investor, maybe the numbers don’t look so much like that.
So right now we spend $68 billion. University of Chicago did a study showing that the actual cost, and that cost is about $9 billion of that $68 billion. Because if you look at the employment taxes collected, the sales taxes collected, the lower social welfare costs for people working that weren’t working, they work out that the $68 billion, the net cost, really works out to $9 billion a year, not $68 billion. I ran the numbers at a trillion to get everyone to $15 to $20, and it’s pretty interesting. Using the same logic as the University of Chicago, that would take the cost down to about $600 billion, net cost, each year.
At the Washington University, they did another study and they said the cost of childhood poverty, every year to us, is about a trillion dollars. That’s due to healthcare, poor childhood healthcare, the long-term cost of that. What does that cost us today? Poor education, crime, incarceration, homelessness, social service costs. All that, we’re spending right now, a trillion dollars a year because we have childhood poverty. If we increase this program to a trillion dollars and got a lot of people working for $15 to $20 that might not work for $7.25, we wouldn’t eliminate childhood poverty. But the way I calculate it, we help out about $500 billion worth towards that trillion that we’re already spending. So I took the cost down to $600 billion, now I got $500 billion. Of that cost-off, for helping out with childhood poverty, takes us to $100 billion and there’d also be adult medical costs would save us about $200 billion. So I got the net cost out to zero as a long-term investor. In other words, what is the payoff today? We could spend a trillion dollars, but the value of that today is more than the trillion dollars we invested in these people.
I also say I don’t think that’s realistic, starting at $68 billion. So I said, “Now that I told you all those numbers, why don’t we just triple it to $200 billion. That easily pays for itself, there’s much lower-hanging fruit.” See what I did there? So I sent you up at a trillion dollars and I’m only merely asking for $200 billion, which is triple what we have. That will be clearly less than zero. This is one of the greatest programs we have. I suggest to changing its name because Earned Income Tax Credit is such a mouthful. I suggested changing the name of the program to Doing the Right Thing. And I really think this would solve a lot of the…Inequality to people means different things. You know, we certainly don’t have equality of opportunity. We certainly should have equality of opportunity. Equality of outcome is another question. Should we have a quality of outcome? Probably not. Should everyone have a living wage that’s willing to work? And should no kids in this rich country be in childhood poverty? I think we could probably agree on that. And so this is one way to get us a lot closer and in a way that as a long-term investor, it makes sense.
Meb: It’s an interesting take on this topic because, you know, you’ve heard a lot with Andrew Yang popularizing and others this concept, universal basic income, and the trouble with that is that I think if you speak to most Americans, they very much still believe in this concept of thrift, and entrepreneurship, and capitalism, and free markets, and democracy, and freedom all at its core, regardless of, you know, the challenges of people having discussions in the media. And I think most people want to work. This is an interesting take to me because it does incentivize people to continue to be working rather than, you know, “getting the money for free,” or incentivizing the struggles of just not working. What is the path? You know, we have policymakers listening to the show. I don’t think at the top presidential level yet, but maybe we’ll see, who knows. If you were speaking to congressmen, senators, what would say? Is this something that would be applied universally at the federal level ideally? Would it be something where some of the states would try it on their own? How do you get something like this to be enacted?
Joel: Yeah. I think you’d have to do it on the federal level. You know, they’re the only ones with a printing press. And if you get into the mind of a long-term investor where we’re actually making money from doing this, taking people out of poverty and saving all these costs that we’re already spending, I think you have to work with a different mindset. I’m not a modern monetary theorist or whatever, but I am an investor, and investing in people is the best way, I think, to get long-term value. And so I feel that way in education, I feel this way and living wages. People learn a lot on the job, they get a lot of benefit from having a good-paying job and providing for themselves and providing for their kids. And everyone intuitively understands that. I don’t think they intuitively understand that we can afford to do it and make money from doing it. So I wanna share that information and hopefully it helps the dialogue. You know, I know it’s a big leap, so that’s why I didn’t ask for the trillion upfront. I’m asking for $200 billion when that works really well. Maybe we’ll keep expanding it. And I think getting the ideas out there, educating people about the facts and how tough they are right now. And I think the pandemic’s done some of that. I think people will be more open-minded to something like this.
Meb: I like your marketing hat, Doing the Right Thing program. We used to joke that Yang should…instead of calling it universal basic income, should adopt something in the lines of freedom, dividend, something that sounds a little more free-market-oriented as a benefit to the capitalistic structure. Despite the rhetoric and the negativity we consistently hear on the media and politics, the U.S. is still the place that you go travel around the world and everyone wants to come to the U.S. Land, still, of opportunity. You know, I’ve spoken to countless friends that are immigrants that have started businesses, if not them, then their parents. We have the weirdest immigration system. And it’s one where you talk to no one and they think it’s a great system. Give us your proposals. What are your thoughts here?
Joel: I agree with that. I guess I’ll start with one fact. According to the business roundtable, we come in second to last of developed countries in welcoming skilled immigration. The only country that we’re better than in welcoming skilled immigrants is Japan. Japan discourages immigration, number one. Number two, you sort of have to speak Japanese. United States, English is our main language. That’s the language of business and science, huge advantage. You know, if you look at what immigrants have brought to this country, the facts are, if you let in a skilled immigrant, we make between a half a million and a million dollars in today’s dollars, present value, of how much they contribute to the government versus how much government services they take. That’s just a fact. Okay? Between a half a million and a million, depends how educated you are, but you get a half a million to a million and you create about two jobs. So for every skilled immigrants we take, we get half a million to a million dollars and we get two jobs for people already living here. We create two jobs. That’s what a skilled immigrant does. Free goldmine that we’re not taking advantage of. You know, we’re in second to last place.
Immigrants founded 51% of U.S. startups over a billion dollars. Okay? They’re twice as likely to start a business as natives. They’re responsible for a quarter of the productivity growth over the last two decades. Immigrants or their children founded 216 of the Fortune 500 companies. Bill Gates said at Microsoft, I guess the level of their skilled immigrants is pretty high, they create four jobs for every skilled immigrant that they hire, four new jobs, not just two. So they even do better. So I argue that it’s a free gold mine and countries like Australia and Canada let in as many as that will come. They set standards of what kind of education do you need and what kind of skills do you have?
And I argue that we have a better system than they do. Just because you have certain skills or you have certain education doesn’t mean you’re a good fit for a job. Doesn’t mean you’re an ambitious person. Just means you have some government-approved credentials. The way our H1B system works, which is really broken, in other words, we exceed our maximum by triple and the first five days of how many we let in. So the first five days of eligibility, we have three times more applications go in for H1B visas. They’re expensive, they’re difficult. They’re uncertain whether you can really stay. It’s a very expensive, inefficient system. There’s one great thing about it. It’s a one-to-one perfect match. The way you get in on an H1B visa is someone wants to hire you. So we have a big advantage there if we have an employer-led skilled immigration system.
What I suggest in the book is that if you can find an employer, you’re a skilled immigrant, our definition of skilled is they’re willing to pay you $60,000 or $70,000 a year, and then they can hire as many as they want, skilled immigrants, as long as their company’s willing to pay $60,000 or $70,000 a year, as long as they’re also willing to pay a 20% tax on top of that salary to the federal government. Okay. We can use that for job training. We can use that for a lot of things. Of course, they’ll hire any person who’s living here who’s qualified for that job so they don’t have to pay the 20%, but they can hire as many as they want, pay that 20% tax to help with job training and a lot of other will create a half a million to a million dollars for each one in today’s dollars, create almost two jobs for the people already here, for everyone we take in. We should make it unlimited like Canada and Australia do. They would be a huge gold mine for us.
I think the problem we have is that immigration is such a politicized topic and we have the Statue of Liberty, which said, “Give me you’re tired, your poor,” you know, what do we do about refugees? What do we do about people seeking a better life here? Okay? Well, people leave their countries for lack of opportunity, or political freedom, or they don’t feel safe. United States, as you suggested, we have those qualities in spades. There was a study done that we are the first choice of skilled immigration across the world. Second choice is Germany, four times as many people want to come here. So we’re really blowing this free gold mine. And what I suggest is I think we should help refugees, unskilled immigrants to come here. And so what I suggest is if we take one or two skilled immigrants, for each one of two that we take, we can lend an 8 or 10, because they’re expensive to take in, but we can take in 8 or 10 unskilled immigrants, okay, for every one or two skilled immigrants. So we can do that with all the free money that we get from taking the skilled immigrants.
Or we can bring 8 or 10 kids out of childhood poverty that are already here. We could do that with the money. And I don’t wanna get in a big argument about which is better to do. They’re both great. Probably should do some combination. And all I argue in the book is let’s take the free money first and then figure out what to do with it. And so those countries that lack opportunity or political freedom and safety, those have what’s called a brain drain. We should be a brain magnet. Everyone wants to come here. We are the best melting pot. We have all kinds of problems. They’ve come to the ford pandemic. We have difficulty. It’s just that we’re better than everybody else. We’re a better melting pot than everybody else. There’s plenty of problems in Europe. You know, taking in people who look a little different, they’re not very good at it. All the problems that we have, and I’m not gonna belittle them, we’re better. We’re a bigger melting pot. So we have every advantage. It’s free money. We got to take this. We can do a lot. And we can build a country. It’s a great investment for us to take in. You know, someone else educated them and we should take all that.
Meb: The nice thing about this idea, and a lot of your ideas fall into this category and we talk a lot about this with politics is, you know, if something’s not working, at least try something. And so your ideas, you know, some of them, I can understand why they would have some more pushback than others, but this one, it seems so obvious, you know, because it’s got both sides of it. It’s such a no-brainer to welcome highly skilled people from all over the world. I mean, that’s just such a massive no-brainer. But again, having sort of the moral balance of, “Look, we also want people that, you know, maybe haven’t had the opportunity.” My friend calls, you know, have a P.h.D. in life though, poor, hungry, and driven, right? Because a lot of those individuals turn out to be the greatest, you know, entrepreneurs, founders, scientists too. And so having that balance, but who argues this? Like, why would you not try this?
Joel: The reason I wrote it was just to provide the facts and the…You know, obviously, a lot of tech companies are like begging for, you know, skilled people to come here and it gets conflated with the rest of the immigration arguments and taking jobs. And so I thought the 20% of the fee, of course, you’re gonna hire somebody that is…the 20% tax, of course, you’ll hire anyone qualified here before you do that. So we’ll create more jobs here. We’ll get more money to support more people and do more good things and we will be a juggernaut of innovation, and technology, and job creation, which, of course, we need. So I think it would be great and I hope someone listens.
Meb: Keeps the demographic strong too. You know, a lot of countries, like you mentioned, Japan, struggling with a different type of demographic situation, but the U.S. certainly in the developed world has as one of the better ones and with this, sort of, complement, we’ll continue to. Listeners, I don’t want to give away all Joel’s good ideas, so I want to pivot a little bit. Make sure you go read the book, “Common Sense: The Investor’s Guide to Equality, Opportunity, and Growth.” But I do want to save a few minutes just to chat investing. You know, Joel, 2020 has been a weird year. We had the fastest ever from bull market to bear and vice-versa with U.S. stocks. We had oil futures, trade negative. We have sovereign bonds halfway around the world that are negative, a lot of weird stuff going on. Any general, kind of, lay of the land thoughts on markets in 2020 and beyond?
Joel: Well, that’s a broad question, which I wish I had great answers to, but the way we will look at the world is this. I’m not a macro investor, so I look at individual companies. So the way I look at an individual company in light of the pandemic is basically, you know, what’s it gonna earn in a few years in a normal environment and how much is that gonna grow? That’s my goal. That’s, sort of, where I start. So now you can contextualize, you know, well, if the pandemic lasts and is terrible as it is, lasts another six or nine months, how much does that really contribute? You know, obviously, you need a strong balance sheet to get through this period, but how much does that contribute to the value of the business over time? Well over 90% of the value will come from what it earns a few years from now after the pandemic’s done and how much that’s gonna grow over time.
So that contextualizes whether the pandemic lasts or what happens over the next 3, 6, or 12 months. It’s not that important as long as you make it through to the other side. And that’s a big if, but, you know, if you have a strong enough balance sheet to make it through, that’s how we start looking. As far as low-interest rates are concerned, luckily in my business, people give me money and say, “Invest it in the stock market.” They don’t say, you know, “Should I be 30% long or 80% long or whatever?” So we rank companies based on their discounts or what we think they’re worth. So obviously we’ll buy more, the ones that we think are cheaper. So that’s, sort of, how we look at it.
From spending on the pandemic, even if we spend $10 trillion…you know, maybe more, I don’t know what the actual costs will be and how you calculate the cost. Let’s say we borrowed 10 trillion and gave it to people to make it to the other end, at the low-interest rates that we have, one of the benefits is you can borrow money for 30 years at less than 1.5% and it will cost you $130 billion or $140 billion a year to carry that. And after inflation, it’s probably free, but let’s just say that, you know, adds 3% to our annual budget. It’s not the end of the world. We should spend…you know, if you’re asking, should we spend to get people through this period? Yeah. We should spend to get people through this period. It’s not an entitlement that’s gonna last forever and destroy us forever. It’s a one-time…it’s like we fought a war and we have to get everybody through it. But those expenses end when the war ends. And so the vast majority.
So I think we have to spend that’s why I wouldn’t worry about what we spent now or that we’re blowing through the budget this year helping people. We got to do that, and we can afford to do that. And we have this great ability to borrow money at very low rates for long periods of time that should let us do that. Don’t ask me why we can do it for free after inflation, but we can. So we should. That part I know. If they’re giving away free money, I should take it, and especially to help people through this period. And I think long-term there’ll be too much damage if we don’t. So I think we should even probably be doing more work than what we’re doing to help people through this period because as long as it doesn’t become a long-term entitlement, I think we can afford it. So that’s really where I am.
Meb: For someone who’s talked about value in the past, and I know value means a lot of different things to different people, traditional value strategies have struggled at some degree. There was news today that a big quant value shop was shutting down $10 billion. I got to feel a little bit. This feels almost like Tiger in the late ’90s. Any general thoughts on value across the board? I know the pandemic has, sort of, separated certain companies into two buckets that benefit short term, but any general thoughts on investing styles or value, in particular?
Joel: Sure. Well, thank you for the question. You know, if you define value like low price book, low price sales investing, it’s really taken on the chin over the last five years. You know, I think it’s been about 11% or 12% per year. Last 3 years, it’s been about 17% a year, that growth, speed, and value. In the last year, it’s been well over 40%, that growth, speed, and value, according to that definition. I gave a talk a few months ago, I guess it was a year ago now, is value investing dead? And my answer was yes, no, maybe, I don’t care. And the reason is it depends how you define value. There’s no private equity firm that goes out and buys a business because it’s low price book or a low price sales. They’re looking at cash flows and how much they’re gonna grow. As Buffett said, growth and value are tied at the hip. So it’s a silly question anyway.
So if you’re defining it like Morningstar or Russell defines value with low price book, low price sales investing come back, my inclination is yes, it will come back. Do I care? Not really. That’s not how I consider value. I mean, like I said, we value companies based on cash flows, how much they’re gonna grow over time. They may sometimes coincide with low price book, low price sales, but what I usually would say is the reason that it has traditionally worked over 40 years is that if a company is selling close to the historic cost of its assets, you know, low price book or something like that, and you buy a bucket of companies that are low price book or low price sales, you’re probably getting more than your fair share of companies that are out of favour. That’s just what you’re getting. So it’s correlated with good returns in the past.
If you take something like momentum, it’s worked for 30, 40 years, not just this country, but across the globe with a couple of exceptions. That’s worked over 30, 40 years, but if momentum didn’t work over the next 2 years, it could be that it’s just cyclically out of favour, it works over the long-term, just be patient, or it could be not so hard to figure out, stock used to be down here and now it’s up here. It’s got good momentum, the trades crowd, and it’s degraded. And that’s why it doesn’t work over the next two years. Two years from now, I wouldn’t know the answer to that question. Is it just cyclically out of favour or is the trade degraded? So momentum’s another thing that has correlated with good returns in the past.
All I really care about, to answer your question, is causation. Causation has to do with valuation of a business. That’s what stocks are, they’re ownership shares of businesses. And the way I value a business is based on normalized cash flows and how much they’re gonna grow over time. And whether they’re low price book, or low price sales, or they’ve got good momentum or whatever, these are factors that have correlated with good returns in the past variously over time. Whether they continue, doesn’t matter to me. It is possible that people don’t recognize the values I see based on cash flows and growth, even if I’ve done a good job over the next two years, but I’m not gonna stop doing that.
So my definition of value investing, conveniently, is figure out what it’s worth pay a lot less and if I’m good at that, I’m not gonna stop doing that. So that’s my definition of value. So much closer to the way Buffett, I think, would look at it than Morningstar or Russell where they do classifications based on factors, which don’t mean a lot to me. I mean, if I came to you with a real estate investment strategy that said, “Yeah, I’m gonna buy all the houses that were up the most in the last three months,” you would look at me like, you know, I was a little bit crazy or stupid. One of those two. And even if you did, you wouldn’t give me money because it doesn’t sound very smart. And so that’s, sort of, the way I look at some of this factor investing.
Meb: I was smiling because I was like, well, you haven’t been to my neighbourhood in L.A. where it seems like everyone wants to buy the house that’s gone up the most in the past two weeks. When we were travelling this summer, things went a little sideways in L.A. They closed the beaches, they closed the parks. I said, “I need some fresh air.” Saw my family in Colorado, drove around the West, and stopped in a few places, but was in Bozeman and they’re like, “Oh, dear God, this real estate market is absolutely going through the roof,” because, for reasons that are obvious, everyone wanted to get out of dodge and find a place safe in the wilderness. So Bozeman is seeing, like, the average house on the market for like one day. But yes, in general, I agree with you. All right. Two more quick questions and I’m gonna let you go. Joel, you’ve been very gracious with your time. Last 10 years, last 20 years in the investing markets, anything you’ve changed your opinion on that, sort of, something you used to believe that no longer believe or vice versa?
Joel: Well, that’s a great question. Well, you know, I’m not very good at predicting interest rates. I thought they were low 10 years ago and they’re still low. I still, when I invest in equities, I assume that the risk-free rate is a lot higher than when rates get this low, 1% or 2%. I still use a much higher hurdle for the risk-free rate, but, you know, whether it should be five or 6%, I don’t know. But if I can’t beat that, I won’t invest in something. So that’s one thing. And I guess another is just the focus on quality. You know, I think that’s important.
And then the other is that there are a lot of businesses that really are thinking longer-term than usual. Used to be you’re an accountant and you pay $2 to get a customer and you get a dollar from them this year. But if they signed a subscription business, maybe you’re getting, you know, and the lifetime is eight years, it looks like you’re losing money on the accounting balance sheet, right? You’ve spent $2 spending money. You got a dollar of revenue this year. You lost money this year. But if the lifetime value of that customer that you just acquired, you know, in a subscription business is eight years, then you’re really making money on that even though the accounting statement says you’re losing money. And I think that was a revelation that I’ve understood better and better, you know, customer lifetime value over the last 10 years or so. And so I have a big appreciation for that and when I value businesses I’m looking more long-term for those types of businesses. So I think that’s been helpful.
Meb: My family can sympathize with that concept. We are…I shouldn’t say we. I’m a big fan of the subscription boxes. So my wife is often just like, “What in the world is going on with these businesses?” Last question. Joel, looking back over your career, good, bad, in between, up, down, what’s been your most memorable investment, the one that’s seared in your brain?
Joel: Well, probably the worst investment I ever made was…you know, everyone understands the lesson in financial leverage. You know, you put up a dollar, you borrow $9, you buy something for $10 and it moves a little bit, you lose all your money. You can make a lot of money but you could lose a lot of money quickly. So everyone understands financial leverage. And so I got a lesson, this is probably going back 20 years now, but in operating leverage where I was investing in a trade show company where they could rent space from the venue for $2 and re-rent it to an exhibitor for $62. So I thought that was great. You know, they could keep expanding because there was plenty of venue space at $2 and taking $62 from the exhibitor and it had great operating leverage and I viewed that as a great thing.
Unfortunately, this was around 9/11. Actually, this company, a few days before 9/11, bought another trade show. They both, unfortunately…you know, no one wanted to travel at that time. And so they both, the business they bought and the original business fell off a cliff. And when you drop, if you take $62 in revenues and $60 of it was dropping to the bottom line and you lose any revenues, it’s disastrous. And I didn’t realize how much leverage the business had. You know, it seems the operating leverage is great on the way up and it’s terrible on the way down. And, you know, taking that into account was a lesson in operating leverage. And I think everyone gets their just desserts when they invest in something with a lot of financial leverage where you put up a dollar, borrow $9, you borrow a $10 thing, it goes down to $9, you lost all your money. Everyone gets that and said, “I’m a big boy. I understand what I’m doing.” Well, I didn’t really understand operating level purchase as well as I do now. And it’s been a humbling, expensive lesson that I’ve never forgotten, I would say.
Meb: One of the three Ls from Charlie Munger, liquor, ladies, and leverage. Joel, where do people go? They want to find out more what you’re up to, your writing. Is there any place they can track what’s going on in Joel’s world?
Joel: I don’t have a blog. You can go to Amazon and read “Common Sense.” This is my latest book. So that’s my latest thinking on things that matter to me a lot. And, you know, I’m starting a business called Invest 5 to adjust for some of the lower…people who want to start saving for retirement earlier at lower income levels that don’t think they have access to these things. And so I hope that works out.
Meb: Can you give us a preview on that?
Joel: Invest5.com. You can start saving at $5 a day with no monthly fee and invests in a fund that we run that is an offshoot of the S&P 500. Buys all 500 stocks but overweights some a little bit that we think are cheap and underweights the ones that we think are expensive. And we’re just really trying to…starting something called Invest 5 University where I’m trying to educate people on all, you know, from soup to nuts, from freshman year through graduate school in investing. And so I’m very excited about writing that. And so that’s gonna launch in a few weeks. And so excited about that.
Meb: Awesome. Listeners, check it out, the book, “Common Sense: The Investor’s Guide to Equality Opportunity, and Growth.” Joel, thanks so much for joining us today.
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