Advice for Aspiring Investment Professionals

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It's an all in one fully integrated platform that makes your work easier CRM, accounting, inventory, e commerce and more And the best part, OdDu replaces multiple expensive platforms for a fraction of the cost That's why over thousands of businesses have made the switch. So why not you Try Odoo for free at odoo. com That's OD O O d. com stududies Play Come together on a Windows eleven PC. And for a limited time, college students get the best of both worlds. Get the unreal college deal, everything you need to study and play with select Windows eleven PCs. Eligible students get a year of Microsoft three hundred sixty five premium, and a year of Xbox GamePass Ultimate with a custom color Xbox wireless controller. Learn more at windows dot com slash student offer Law supppplies last ends june thirtieth turnerms at aka. mS slash college PC Welcome to Profty Markets This could be one of the most consequential weeks for the markets in years. Today SpaceX is expected to complete the largest IPO in history And it may be just the beginning. Anthropic and Open AI have both filed to go public, setting the stage for a wave of blockbuster offerings. Meanwhile, some of the richest companies on the planet are competing for investor capital before the IPO pipeline fully opens As we've discussed last week, Google announced the biggest stock sale in history, and meteta signaled that it too. exploring a major equity raise. So how should investors think about this moment? What happens when an unprecedented amount of equity hits the market? What are the opportunities and what are the risks? To help us make sense of it all, we're joined by someone who' spent more than thirty five years writing some of Wall Street's most influential memos and has earned a reputation as the king of common sense His memos inform investors across finance, even Warren Buffet himself. This is our conversation with Howard Marks co founder and co chairman of Oaktree Capital Management Howard, thank you so much for joining us. I want to start with a quote that you said in one of your earliest members. You said, quote, In the late stages of the G Ball markets, people become willing to pay prices for stocks that assume the good times will go on ad infinitum about to see this SpaceX IPO. This company is about to be priced at more than one hundred times sales. We have a feeling that this is a little bit of Investor spirits, animal spirits, people thinking it's the good times. What do you make of this IPO and the other IPOs that we're seeing? Is this a frothy market There's no question about the fact to use Alan Greenspan's saying from about thirty years ago that we have exuberance That's the only thing we know for sure Heat pioneered the phrase irrational exugerance The question is, is today's exuberance irrational Number one, I don't think anybody can definitively say so And the reason I say that is that I don't think I've never heard anybody tell me exactly what AI will be able to do or when or for wh or how much profit it'll produce and for hold There's an arms race going on between what you described as some of the greatest companies on the planet I would describe what we call the hyperscalers as mostly the greatest companies I've ever seen. And they're engaged in an arm race, arms race Only one win, is it win or take all? C several win? Nobody can tell me these things So I don't think there's an analytical or what we call a value based way to decide whether or not to participate in these IPOs And if so, at what price where're in you know, AI as far as I think virtually all of us concerned is a concept We can't define its parameters and U It's a great concept. likely to be the most powerful force any of us have ever seen. That's I think that's all we know and a decision partarticipate or not participate and what price to participate at is Really No Well, it's what my South African friends call a thumb sock You know, you can't put numbers on a pad to figure out what these things are worth which is what value investors like me historically have done I guess the question then is Because I agree with you that you ask these questions and investors say, don't worry about it. It's not really about the fundamentals right now. It's about the future. It's about the technology. It's about what's going to happen at some point in the timeline That sounds a lot like the irrational exuberance that we have seen in previous cycles. and you've been around to see many of them and you've invested and made a lot of money, trading and figuring out an investment strategy to profit off of those cycles and to time it correctly Um, or if you could correct me on what your strategy was Does it not seem like those previous cycles does not feel to you like I don't know D. com era It does feel like that. We have a techn logical innovation I've seen Several. I've read about many more over the last, uh Let's say one hundred and fifty years. This may be the greatest This may be the most powerful It's also in many ways, the least specifiable So the technological innovations I'm talking about, let's just for a starting point, let's say the railroads Back in the eighteen sixties And then radio in the nineteen twenties the automobile. U Comuters. in the nineteen fifties and sixties internet two thousand Uh It may be revisionist history I think we had a better view of what all of those could do They didn't have this unimaginable, unlimitable outside The day I has or the in my opinion, degree of uncertainty. We knew that the railroad would carry goods and people from coast to coast U we knew that radio would carry messages we may not have known exactly how they would produce profits or how they would become television. Um An anyyway All the things I mentioned accompanied by what we call bubbles People got excited about developments which were unprecedented they through vast amounts of money about building the infrastructure for it There was a winner take all Raceed It was excitement There was exuberance. ital float in like water in every case Too much capital float in I think it's fair to say too much infrastructure was built And Prices. pain that were too high And a lot of the people providing the capital for these Bubbles. lost their money I think it's fair to say those comments are been true in every case that I enumerated So I wrote in a memo recently this year, and I think it's true If this technological innovation with its exuberance doesn't produce a money losing bubble It'll be the first And now it could happen. you know, you can't rule these things out And you know, maybe this is a good time for me to introduce the rejoinder they uh, of the optimist. What do they say This time it's different Okay, that was true about the railroads. It was true about radio, It was true about computers and the internet. But this time it's different And this time we have a development of incaalculable, unlimitable Uh, value So there this time, it's really true that there's no price too high. That's what they say.ight. But the problem with that E is they always say that This time it's different is never different And they've set it in each of those bubbles that I mentioned, I think So Nobody including me should say definitively that this is a bubble that the people who invest in these early stages of AI will lose their money, that the people who invest in the companies you named U prices that they'll never see again You must be alert to the possibility. the way people get into trouble by not being alert to the possibility And this all seems incredibly relevant today on the day when BpaceX is said to go public. close to a two trillion dollars valuation, we'll see how it trades. But if you're looking for signals of everything you just described It seems like that's it My favorite fortune cookie says that the cautious seldom or write great poetry So So you know, investing in these companies today could be a huge error could be great poetry And the people who resist because it could be an error. could miss out on the greatest thing in history And that's what makes these decisions so hard people who invest today Yeah traditional industries in transportation and distribution, U in retailing and real estate They don't. Cam For the most part the risk of creating of committing grievous error But they also don't have access posossibly best thing in history So you just have When you sit here, with something that's so young and we're the future is so unestimable. You just have to deal with it as a concept or not deal. How does an investor deal with it, so to speak? I like the fact that you said You know, sort of like You know, what could go right? The upside is sort of Unimaginable the downside. I mean, it sounds like you recognize that. Both scenarios are feasible here. The bulls could be right, the bears could be right. But in terms of how do you actually invest around it? because I look at these companies at a four trillion dollars valuation, If it is in fact the upside scenario, I don't see how any other company survives. We end up with five companies if these companies actually become worth fifty or one hundred trillion dollars. if they have the same type of returns we're used to getting from Amazon or Apple or Google when they went public, that means there's going to be Three or four companies controlling all of the market cap globally, which my mind blows trying to think about what that would mean for society If you're a twenty five or thirty five year old trying to, you know, thinking about building wealth and you got your four one K, how do you invest around the kind of the unknowable here? In dealing with the future, the way most people deal with the future is by coming up with a forecast I argue strenuously that if you want to deal with the future, you need two things, not one. you need a forecast And you need a judgment regarding the probability that your forecast is right So You can make a forecast about the future of AI. you can make a forecast which is optimistic But I just think if you say This is my judgment about the future of AI. and by the way, I'm highly confident that I'm right I think you're probably making a big mistake Uh, you know, I've never met anybody who who thinks they can tell me what this world is going to look like five or ten years from now And and so why should any the young person you described whos starting who's laying the foundation for his investment portfolio, why should he conclude that he's probably right when all these other people are. We know it could be great I bet it's probably going to be great. I said in my last memo that in terms of its basic capabilities My guess is that it's more likely to be underestimated today than overestimated today But what we're talking about is How much capital should it receive And What is a piece of a company that engages in this activity worth. you know, the value investor, the old fashioned investor like me and and my fellow travelers What we do is we figure out what a company' like, what we look at what it makes today and what is potential earning power it's building We try to figure out what its earnings will be in five or ten years We put what we think is a reasonable valuation on those earnings largely related to the earnings potential in the subsequent decades And then we look at the price today and we try to figure out whether today's price is fair. relative to that earnings power You know I don't think I've ever seen an industry or companies where that is less feasible You know, if If somebody will will tell me what they think anthropic Net earnings will be in twenty thirty six I'll bet him they're not within fifty percent off the truth Of course, we have to wait ten years to find out If I'm right, then you and you make an investment in anthropic stock in the IPO You have to except the likelihood that you're that what you're doing is closer to speculating And I don't say that word bjoratively than than analytical investing And you have to there's a there's a there's a spectrum which goes from what I'll call analytical investing in prosaic understandable companies So ulative investing in Futuristic companies that can't be described at all And you have to should you should calibrate your activities based on where you are on that spectrum. That's the whole thing and it's very hard to do. Epecially this is the hardest thing I think I've ever seen in the investment world because of this enormous degree of uncertainty Are there other sectors where you feel more confident other asset classes or other B businessiness sectors where you think you're more comfortable looking making a forecast and saying this appears to be overvalued or undervalued? Well, that's what we do for living and Historically, we have made those judgments And And, you know, pretty well God But then since the internet came along, roughly thirty years ago, we have a new concept which is extremely important today, and that's disruption You take what I call a prosaic company in a prosaic industry. And you say, well, it's not so futuristic. We can probably anticipate what it's going to look like in five or ten years from now. And it's not it doesn't have these technological things that that are going to make it or break it. that you think a little further and you say, well, let me think whether that's right. You know, thirty years ago O We have this word in a value investing business or the investing business called emote things that surround a company that are protective. that make it less and historically, the value investor, the cautious andalyitical investor has preferred to invest in companies with Ms So if you go back thirty years ago What was an example of a company with a great mode? And a great example is a newspaper And if you own the newspaper in a given city It would be hard for a competitor to start up from scratch The newspaper from another city couldn't compete against you because the used car ads and the help wanted ads and the movie times would all be Iirrelevant in your city And it cost a quarter, let's say So anybody could afford it. And if people bought one today They'd still have to buy it tomorrow because Yesterday's newspaper is already obsolete So it's a small amount of money that people are going to spend regularly and they're never done buying it And it can't be you know, there are reasons why radio couldn't compete and why the newspaper from the next town could compete. That was a strong set of moes. A lot of smart people invested in the newspapers and made a lot of money Now it's true of the movie industry and other in particular communications industries But now The newspapers are a lot of them are out of business and u They're under profit pressure U So what happened to the mook And the answer is that the internet and digital communications came along. put a lot of them out of business and gave them etian that nobody thought possible thirty years ago So so and I'm sorry for the length of this discussion, but What? can't be disrupted Now by AI Who can't lose their job to AI I used to say, well, how about everybody says plumbers. Well, maybe maybe a robot can come into your house and with a camera and assess your situation and make the needed repairs Then I said, a masur Why can't somebody build a robot that can give you a good massage And so The world has become a much more uncertain place the probabilities that can be assigned to the future Lnd water today than ever I think that's an important change when I was a kid The world didn't change. was always a dime New technologies didn't come along that often All world we were pretty confident that the world would look the same ten years later And for the most part, it did Today, I think you have to accept Much more change is possible. So the investor has to recognize he or she is living in and dealing in a much less predictable world We'll be right back after the break. And if you're enjoying the show so far, send it to a friend and please follow us on YouTube, Spotify, or wherever you get your podcasts. 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Just go to indeed dot com slash podcast right now and support our show by saying you heard about indndeed on this podcast. That's indeed dot com slash podcast. Terms and conditions apply. Need the ride higher fast then this is a job for indeed sponsored jobs Support for the show comes from Odu Running a business is hard enough. So why make it harder with a dozen different apps that don't talk to each other One for sales, another for inventory, a separate one for accounting Before you know it, you are drowning in software instead of growing your business. This is where Odu comes in Odo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything CRM, acccounting, inventory, e commerce, HR and more No more app overload, no more juggling logins, just one seamless system that makes work easier. And the best part OdDu replaces multiple expensive platforms for a fraction of the cost. 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Where do you find value right now I still think there is a a more predictable part of the economy It'll probably be a while before the energy business disrupted to the point where we use something in lieu of oil and gas That's probably largely true of the food industry. h probably the timber industry and the home buildilding in is A. transportation It's probably going to be a while before we walk into a station become dematerialized and show up in another city Rail No you know, has been disrupted, but it looks we're maybe we're at a baseline level of of in person shopping that's not going to go further. I don't know you can identify areas out you know, metals and mining ap chemicals. I guess I would say for the most part, that things that have less intellectual content are less likely to be disrupted Bye AI, which is Basically intellectual Trumps are and productivity tool So You know I think I think that's You can we can make a list of things that we think are uh, less likely to be disrupted by AI. we just shouldn't be too cock sure about it But that's what we do for living We're still investing, We're investing according to the same investment philosophy And in many of the same industries, U We have to constantly renew our thinking. The worst it seems that the most laughable thing to do today would be to say You know, I found some companies in the industry that industries that'll never change I'm just looking at the Silla PE ratio, which is currently Close to forty two veryer close to the bubble era where it hit a peak of forty four times earnings U That right there is an example of an indicator that we could Draw whatever meaning we want from it. Um, and I could say, okay But here we are. We're at the top. this is the bubble I'm not sure how much I should believe that. I guess my question to you, what kinds of indicators do you find to be most informative or most valuable when you're assessing the exuberance and the value of stocks and bonds and everything in the markets today We start with the traditional indicators of valuation, like the PE ratio whether it's the chiller Cpe ratio or the traditional S andP. P E rato. and You know, those things show that the market to be I used the expression a year ago, lofty, but not muddy You know, the the the non shller PE ratio is about twenty three or so today the eighty year average is sixteen So we're roughly fifty percent higher today, but in two thousand, I think it was thirty two When I started in this business as a young man, nineteen sixty nine in the research department at Citibank The bank and most of the banks invested in what were called the Nifty fifty considered to be the best and fastest growing companies in America, Xerox, IBM, Kodak, Polaroid, Merck, Lillily, Texas Instruments, Hwt Packard Cola, Avon, et cetera and Most of those stocks were selling at pe ratios between sixty and ninety So to look at the Yeah next seven take out Tesla. Their song at P ratios in the thirties Thatt sound so expensive to me But and that's just PE. You know, you can't just depend on PE. That's too simplistic The companies are different their capital intensiveness Lower there their marginal profitability is higher since the product is an intellectual product rather than a piece of metal it doesn't cost much to make the next one. So they can So they can their incremental profitability is much higher. And then Another thing is We've never, ever seen companies growing at the rates of today. You know, and I don't know the speacific, so I don't want to go there, but you know you hear about companies that are growing fifty percent a month. or a hundred percent a year or whatever it might be You've never seen that before. and You know, uh, you look at A on and the progress that it has made in the last four years. Three years ago Uh, you know, you talk about moes, you talk about impregnability Three years ago, most people thought software was a great industry. u to invest in because u everybody who who used computers, which was everybody needed software And if you had a software system that served your company and industry Uh It would be expensive to change and for the most part, it was hard to figure out a reason to change. So that's a pretty good mat More recently, people are wondering whether the whole software industry is going to go out of business. Be because nobody writes software anymore. AI. writes its own software for itself H peopleople have to tell it what to write, but it can write it without any help So now people have in that world is There's something called Sa software as a service. And around february first, we had something called the cespocalypse where, you know, the the u The great AI companies announced some some coding models and everybody said that's it the whole software industry is going out of business. Now that's probably an exaggeration I very hard to figure out these things. By the way I want to come back to something. that you asked me a long time ago And I never I didn't answer and I don't want to leave it unanswered. How do you invest? in this given all these uncertainties that I'm talking about. And you know, what history has shown is that one of the greatest mistakes you can make is being not optimistic enough. And another mistake you can make is to say The future is unclear so I can't invest. Those two things don't necessarily go together. The future is always unclear Maybe it's more unclear than ever not a reason not to invest. You just have to invest carefully Knowingly, you have to be aware of the risks you're taking So How to invest in AI? like anything else, there's a spectrum And at one end of the spectrum, we have ultra high possible returns with great uncertainty and at the other end spector, Maybe we have somewhat lower possible returns with less uncertainty. All of this is more uncertain that spectrum still exists. And so you can choose a point on that spectrum. Let me give you a couple of examples U You can invest in what we call the hypers sccalers Amazon Google Ma Uh, Microsoft I For example They have established businesses withith Motes enormous operating cash flow They want to get into AI, they Mbe feel that they have to compete vigorously in this winter take O battle. O You with established businesses and cash flow and some diversity of business ese are, as I said before without naming names Some of the greatest companies I've ever seen So so you would think that investing in them would be Maybe the low risk way to invest in AI. But if AI booms and takes off and our couples in the next three years, since they have other businesses holding that. their growth rate. they're not going to be the maximum Profit winners Then you have uh, established companies As you said before, you don't we don't know their profitability, their finances and maybe and they're one product companies in the sense that they're All AI So maybe it's harder specify their future anthropic and open AI, for example Nvidia very high ility I think, not being an expert high probability of still being successful five or ten years from now They may not be The number one they are today there unlikely, I think, to be obsoleted. their depending on the price you pay and its fairness, they may be riskier than the hyperscalers They're not make it or break it. They're not You know, they're already up and running. And then you have startups You have startups where you don't know. where they may not have revenues They may have revenues but not profits. You may not even know what the product will be if you can get in at something called uh,, you know, uh ground level And they turn and one of them turns into to be a big winner You can make an incalculable amount of money. And I described this in a recent memo as a lottery ticket And so at the riskiest end of the spectrum You had lottery behavior And if you think about the lottery Most people who buy lottery tickets lose all their money A few people become incredibly rich So that's probably profile of performance at the riskiest end of the spectrum You can pick where to play on the spectrum. you can mix positions on the spectrum, and then you can decide how much shouldould all of these companies on the spectrum be of your total portfolio? I guess the problem just on that point is that it seems that we are muddying what the spectrum actually is and we're almost rebranding lottery tickets as certain safe investments. And I think the best example would probably be SpaceX whose losses grew seven hundred percent year over year. It's an incredibly unprofitable business, especially the AI business Anthropic is also unprofitable, though maybe we're stunn to see, although we haven'ten the financials. if if that's starting to change. Open AI is certainly very unprofitable. But a lot of times when you say this, people will say, but the revenue is growing spectacularly. It grew as you say, like fifty percent month over month, crazy revenue growth. And that's sort of the justification as to why it isn't A lottery ticket. Don't worry about the profitability. The top line' growing really fast And I'm actually not sure what to make of that argument. Part of me wants to say, no, it's still losing a ton of money, still a lottery ticket But as someone who's looked at so many companies over the years, I mean, what do you make of that argument? What do you make of subsidizing these losses to the tune of literally hundreds of billions of dollars This seems like we're entering a new era uh it seems as though Profitability isn't really a thing thing anymore, at least I guess it's not a problem. and they can command these valuations And so I guess I ask that to you knowing that, you know a VC, but you're someone who's seen so many cycles, you've experienced investments work and not work Conceptually. What do you make of it in the heat of the moment in the in the exuberance People say things like, you know, profits don't matter matters is in the future You know, we used to value stocks on earnings. then when we started investing in companies with no earnings, we talked about investing on the basis of sales, ratio of sales Th when we talked about companies that had no sales, people back in nineteen ninety nine, two thousand, people said, well, what How much per eyeball? How much per click And people put values on internet stocks based on how many people were going to their site even though they were going there free I believe ultimately it always comes down to value Ut toate me at some time in the future, profitability will matter And if if if you find a company that's a great tech leader, Today And it looks like it has an unlimited technological franchise and great expertise If you tell me that twenty years from now, it still won't be making money Guess is price paid today by an exuberant investor will turn out. turn will produce discipppline when exuberance is replaced by sobriety. say, Well, of course profits matter. We invest in companies which we think will make money. and their profits ll give will make money for us It's silly to disregard Ptely possibility of profits And by the way, Warren Buffett said in connection with the interternet in I think two thousand He said there's no doubt about the fact that the internet will add to efficiency But that's not the same as adding to profitability. And that's relevant today also You know, AI is going to change the world I have no doubt about that. Wh will it make money for You know? I mean, if it's a if if if all the hyperscalars plus the u anthropics and and open a eyes of the world and Tesla and some of these startups if they all engage in batle and compete against each other at enormous costs How profitable will they be Who will make the money And if AI is primarily a labor saving device, which I might be an accurate description who gets the benefit of the labor savings. Maybe the Customer the shipping company or the retail company or the warehouse company benefits from a price war among AI providers such that the user Its to his or her profits theurveyor of AI services doesnes't do that great These things can't be specified now We'll be right back. and for even more markets content, sign up for our newsletter at proftymarkets. comot C for the show comes from Deletee. Have you ever thought I should really be doing something to protect myself from stalkers, scammers, and hackers? but you're not sure what? Here's what you do. Go to join deelete mee dot com slash propG and enter code propG, and you'll get twenty percent off Delete Me To Lead Me removes your personal information that's being sold on hundreds of data broker sites. I could tell you more or I could let our producer Jen Sanchez tell you about her experience. Using Delete me, Jen. 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Bnd markets are massive murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a dead but not vanguo Vanguard bonds are institutional quality Institutional equality isn't a tagline. It's a commitment to your clients. It needs top grade products across the board. The lineup includes over eighty bond funds. They are actively managed by a two hundred person global squad of sector specialists, analysts and traders. Lots of firms love to highlight their star portfolio managers, like it's all about that one brilliant mind making magic happen. Vanguard's philosophy is a little different. They believe the best active strategies shouldn't be locked away with one person, they should be shared across the team. 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And I remember when I first moved to New York, I was in San Francisco in the nineties and then New York from two thousand on I just knew a ton of people making a great living in your business Now I know a small number of people making an astronomical living and the rest are gone. the rest It feels like there's been just an incredible consolidation in your business where you're either you're either a Leviathan or you're a no man's land I would just love to get your take on your business as a business and how you've seen it change and where you think it's headed. How long do you have? I mean pretty that's a pretty broad question. Sure. First of all You know, u I'm pretty sure I predate you When I attended the University of Chicago in nineteen sixty eight the professor pointed out average mutual fund did worse than the S and P. before fees and then charged a high fee And so he says, why don't they just why don't you just buy one share of each stock in the S andP There were no indexed funds or no concept of indexation, but it came along and it Dob You know, today, the majority of mutual fund equity capital is managed by indexation or passive investment That's one reason why a lot of people have disappeared. The consumer was not well informed and paid a high fee for a effective product, which is not a great business model On the other hand in the last Uh, well, let's say, forty years, which is Maybe it's a little more less, there have been all these innovations I had We lived forty plus years in a period of declining interest rates. which made a lot of things very successful And a lot of people cashed in and built very, very profitable businesses investing in what are called alternative investments private equity, private credit and things like that And and they they found an environment which was perfect for them. And Eespecially since March of low nine, which was the low point of the global financial crisis Things have been rosy for over seventeen years And so A lot of people have made a lot of money. tends to get sorted out. in the bad times. S times the great investors do great, the bad investors do good Bad times, it gets sorted out There may be rougher times ahead for some of these new new things in the investment business And some of it may get sorted out. By the way, let me just closest to home for Oakree U in the last fifteen years they develop a business called Private Credit , which is really just the the the term it's a broader term for what we call direct lending which is private loans for mid size buy outs. and I'm informed on good authority So this c this didn't exist in twenty ten. And it's one point seven trillion dollars today And I'm told there are roughly seven hundred direct lending managers and So the the availability of that one point seven trillion dollars put a lot of people into business and made a lot of people extremely successful along with very favorable economy. and with low or generally low or generally declining interest rates, which are salutary So this has been an ideal environment. And we have seven hundred managers making money in this industry today But What' it look like five or ten years from now We'll find out 'm told that at the seven hundred, roughly three percent that were in business before the global financial crisis So we don't know How many of them what it takes to deal with a harsh environment Making money in a salentary environment proves almost nothing to make money in a salitary investment environment You can do it on the basis good judgment and hard work and skill. Or you can do it on aggressiveness and getting lucky It doesn't get sorted in the good times. Buffppet says It's only when the tide goes out D we find out who's been swiming naked So this period that you describbe ically the period Uh oh nine Date This has been salad days Haly in days And nobody should look at those seventeen years and say, oh, that that's a long period. So that's probably normalcy This was the greatest period imaginable for the investment industry and especially for the alternative investment industry and Oh One day, I think The tide will go out. And one day some of this will be soad just a quick question to wrap up here. We didn't touch on private credit There's a lot of fear and a lot of concern around private credit right now? Do you think those fears are overblown, underblown? What is your view on the private credit market right now? And I realize that's an awfully big market, but a it's getting a lot of attention right now. I think it's overblown These were managers who collected money from clients and and gave loans for mid sizeed buyOs Some of them will be unsuccessful Probably not a large percentage I mean, this this activity has been around in under different guises since seventy eight or ' seventy seven. I was lucky to be asked to start Citibank's Hyo bond activity in ' seventy eight and We've been making loans to companies of moderate wororthiness and and doing well for forty eight years. Dog people who don't do it as well will not have great results. but most of the loans will pay people who are throwing up their hands H God probably exaggerating the difficulty and extrapolating the fears in software which are probably overblown Having said that, Rail investors or individual investors bought these products And these are private loans There's no market for them You can't get out of them at the drop of a hat. and So a lot of the I think most of the unease concerning what you call private credit, what I call direct leently is around the fact that people have said, okay, you know what I'm not that happy. I'd like to get my money back and Yeah, yeah. If you went into a non traded BDC, which is what we call these things you're talking about P said you will we can only let out five percent of the investors per quarter And other people said, you what I mean? I put money in, I can't get it out Well, that was always the terms. G it If you read the perspectivive, which admittedly very few people do, it was there None of this is a surprise People do things in the good times when they're feeling no pain sometimes without adequate care or research or prudence And they turn, they tend to regret them in bad times. Some of that is going on. I don't think there was a misrepresentation. People should not be surprised that they can't get all their money out every quarter and U the One of the most powerful forces in the investment business is disillusionment And people went from Uh