Latest / Words & Numbers / Episode 443: Private Equity in Business

Transcript

Episode 443: Private Equity in Business · Words & Numbers

0:00
Hi, I'm James and I'm Anthony. And this is words and numbers.
0:08
This week, Anthony and I are going to talk quite a lot about
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private equity. Everybody seems to think it's a
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boogeyman. We're not so sure and you'll
0:17
find out why really soon. We're also going to talk about
0:20
sun dimming. Yes, scientists want to dim the
0:24
sun and get this hot priests. The Catholic Church is convinced
0:29
that hot priests are the way to fill those pews.
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Back up all this and more on Words and Numbers coming right
0:36
up. Words and Numbers is a civil
0:38
original podcast. Find out more at civil.com.
0:42
That's civl.com. What's new and exciting in your
0:46
world this weekend? Well, a couple interesting
0:48
stories, one from last year and one from this year.
0:52
Last year, Doctor Ruth Gottsman left money to pay tuition for
0:57
students at Bronx Medical School.
1:00
I I saw that there was really a great story about God.
1:03
I wanted you to say Doctor Ruth Westheimer so badly.
1:06
She left the number is It was. It was, according to the
1:11
article, the largest sum that had ever been given to to an to
1:18
medical school, amongst the largest ever given to an
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academic institution, $1 billion.
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And when I say she left it to pay for the tuition for
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students, I don't mean for the current students.
1:30
I mean for all students at that school.
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Forever, forever, forever. Yeah.
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Yeah. And, and this is, you know, this
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is the kind of thing that you see people doing.
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And you say, Gee, why don't more people do that?
1:45
I'm getting. There, Princeton right now has
1:48
enough in its endowment to never charge tuition again.
1:52
Yeah, which, and that's a whole separate thing.
1:55
I wonder why they are charging tuition.
1:57
But again, that's a whole, you know.
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You know why? Yeah, so that was story #1.
2:03
Story #2 is from this year. Alice Walton, who is ostensibly
2:07
the wealthiest woman in the world, financed the Alice Walton
2:12
School of Medicine. And I don't mean she found as
2:16
many people do they go, there's an existing School of Medicine
2:19
and they pay and their name gets put on it.
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No, no, she actually built this thing from scratch.
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It opens in November of this year.
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Hot shit, yeah, about that. Isn't that incredible?
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And what's going on here is you've got Americans in this
2:36
case, you know, a couple of wealthy Americans, but Americans
2:39
generally give over half a trillion dollars, over half it,
2:44
well over half a trillion dollars in voluntary
2:47
contributions and. And you can bet, you can bet
2:50
that we'll cover this again right about Christmas time,
2:53
because that that's when it becomes most obvious.
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And people say, when I quote numbers like that, they say,
2:59
well, let's just rich people taking advantage of tax breaks.
3:03
No, no, you don't. You don't understand how this
3:05
works. People don't know what tax
3:07
breaks even are if they think that that's what's happening
3:10
here. Right.
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What happens with the tax break is if I donate a dollar, then I
3:16
get, you know, it reduces my tax burden by some amount, let's say
3:20
$0.25. But I'm still $0.75 worse off
3:24
than if I hadn't donated in the 1st place.
3:26
It's not. It's not like somehow I donate
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and I'm better off because of the tax.
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Yeah, no, people break and that's what people think.
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They think if you know, these people give a billion dollars,
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that somehow they get 2 billion back.
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Right. Yeah, No, that's not what goes
3:39
on here. That's so silly.
3:41
And, and you know, for, for those of our listeners who think
3:44
Walmart is evil, it just built a medical school.
3:47
Right, Alice Walton of the Walm Walton family that founded
3:51
Walmart. But but I want to talk about the
3:55
benefits of private giving because you got Americans
3:58
giving, you know, half a trillion dollars, which is now
4:01
on, you know, it's in the same ballpark As for example,
4:05
Medicaid spending, right? It's a tremendous amount of
4:08
money. The benefit of private giving,
4:11
as opposed to the government doing this, is that the money
4:15
goes to what people choose, not what politicians choose.
4:18
We've all heard stories about politicians investing our money
4:21
in stupid things. And that's not to say that that
4:25
people who voluntarily give don't give to stupid things, but
4:28
they have much more incentive not to than the politicians do.
4:34
Also, notice a huge difference when you're dealing with some
4:40
government program that's been set up to do something.
4:44
Let's take, oh, I don't know, public schools is an example.
4:49
If that government program fails to achieve what it set out to
4:53
achieve, what happens? We end up giving it more money
4:58
because somehow the answer is always, well, we didn't give it
5:00
enough, we have to give it more. But in where private programs
5:04
are concerned, if they don't achieve the ends that they were
5:07
intended to achieve, people stop giving the money, which is
5:11
exactly what any sane person would do.
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And so with the with the private giving, you have a sequence of
5:18
programs that come out. They try different things.
5:21
The ones that work continue to get funding.
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The ones that don't, don't, they wither, they go away.
5:26
And so other than that, you you can look up any organization you
5:30
want to give money to and find out how much of the money they
5:33
receive goes back out. Yeah, yeah, you can do.
5:36
You can find that out in a nano. You can find it in a nanosecond
5:40
and and you can find out where it goes.
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The whole bit. You give money to a government,
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that's not a black hole. Yeah.
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You're never, you're never going to know a damn thing about.
5:49
It, well, they'll tell you all sorts of things.
5:52
For example, a lie people will say, well, exactly.
5:55
They'll say things like, well, the Postal Service runs at a
5:58
surplus. Well, it does if you don't count
6:01
the money the government gives it.
6:03
Right, Right. Yeah, I'd run it a surplus too
6:06
if that were the case. That would be fantastic.
6:09
I would love to run it. That kind of surplus.
6:12
Anyway. You might recall that I have
6:15
made fun of politicians. I guess you have to be more, you
6:19
have to be more specific. I have made fun of politicians
6:24
who are utterly convinced that there are malevolent forces out
6:28
there trying to control the weather.
6:32
Are you being serious? They're not just pandering to
6:34
voters. They.
6:35
Actually, you know, Michelle Taylor Green is, is introducing
6:38
legislation to keep any weather engineering away from us and
6:42
this kind of thing. And then we find out that the
6:45
British are actually up to something like.
6:48
They're actually. They're, they're trying to make
6:51
the clouds fluffier so the sun can't get through this kind of
6:55
thing. Well, I got to give the devil
6:58
it's due. Michelle Green might, might have
7:02
been on to something. And I, I have to, I think, give
7:06
her an apology at least of the sort because here's a headline
7:11
from Politico for you. Researchers quietly planned to
7:16
test to a test to dim sunlight. They wanted to avoid scaring the
7:22
public. So many questions.
7:24
So many, Yeah. That's not what.
7:26
The audience answers why. Well, climate change, yeah,
7:31
warming, etcetera. Have they thought through how
7:34
this effects all those solar cells that we put everywhere?
7:38
No, they have not. They they most certainly have
7:41
not done that. And I don't think they're on top
7:44
of what it would mean to farmers and things like this.
7:47
Or yeah, the Amazon forest that absorbs so much CO2.
7:50
Yeah. And they just wanted to have a
7:52
test to see if they could dim the sun.
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What in the name of God's green earth are these people?
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Oh, for fucking crying out loud, they they've made Michelle
8:02
Taylor Green a profit. You've got to be kidding me.
8:06
Everybody just needs to cut it out.
8:09
This is this is not the foolishness of the week.
8:13
This this is a legitimate news thing all.
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Right. Go on.
8:18
I'm waiting. Oh, that's it.
8:22
Can do hold my dear, because we're on to the foolishness of
8:28
the weekend. And for the foolishness this
8:30
week. Where do we go, your beloved
8:33
Catholic Church? Oh, what have they done?
8:36
Oh is right. Their numbers are declining.
8:40
You're probably aware of this, right?
8:41
You probably see fewer people in the church now than when you
8:45
were a boy. You know, but I saw a headline
8:48
just recently saying that numbers were up.
8:50
Of course, I didn't read. I always saw the headline.
8:52
So I don't know what was going on there.
8:54
I think that headline might be incorrect, but here's a headline
8:57
for you. Vatican turns to hot priests to
9:01
spread faith. No, no, no, no, no, no, no, no,
9:04
no, no, no, no, no. Yep, they're they're going to
9:07
find out the priests that are in the gym who look good in ultra
9:11
tight black shirts and they're putting them on social media to
9:16
be that chum in the water that leads people back to the church.
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Imagine how that could go wrong. Well, we're going to find out.
9:28
We're going to find there are pictures in the articles of what
9:30
hot priests look like. So there you go.
9:33
There you go. See, it's a sign.
9:37
A good friend of mine says it's a sign that the Holy Spirit is
9:40
alive and well in the Catholic Church, that it has managed to
9:43
survive for 2000 years despite the Catholics.
9:47
Yeah, could be a sign that the Holy Spirit is confused, but I'm
9:51
going to leave it at that. Get words and numbers on
9:54
civil.com and on Civil's TV and mobile apps.
9:58
Regular episodes are free. Sign up for an annual membership
10:03
to support our show and for access to member exclusive
10:06
content. You had something you wanted to
10:09
talk about. Oh yes, I'm sorry, this was
10:11
actually your topic so you're leaving me to introduce it.
10:15
You want to talk, I mean. Private equity, I'll be, I'd be
10:18
happy to introduce it because our good friend Elizabeth
10:22
Warren, Democratic senator from the great state of
10:25
Massachusetts, is on and on and on in a tweet that I think she
10:29
had out today about the evils of private equity.
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And I don't, I'm not sure. I am sure everybody's heard the
10:38
term private equity. I'm not quite sure they
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understand what it is. I'm not sure I did either Once
10:44
Upon a time. I'm not casting judgement.
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I'm just saying I don't think it impacts most of our lives in any
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way, so we don't think about it all that much.
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And I think that's fine. But Elizabeth Warren decided
10:57
that what the hell was it? Red Lobster and Joann Fabrics?
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And there was another one. Private equity moved in and
11:05
bought up these American icons, stripped them of all their
11:09
value, and now they're all bankrupt.
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And isn't that a shame? And shouldn't we do something
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about that? Oh, heaven help us, and
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politicians are going to do something.
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Yeah, and you know, I'll say it again.
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Don't do something. Just stand there.
11:25
We'll all be better off. Well, but let's just maybe talk
11:29
about Red Lobster. Everybody's driven by a Red
11:33
Lobster, I think, and many people have gone in.
11:37
I don't. I think lobsters are little rats
11:39
that crawl around on the ocean floor and probably not to be
11:42
eaten. They're actually more like
11:44
spiders I think. It just disgusting.
11:48
But people stopped going to Red Lobster.
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Red Lobster didn't have the business model to capitalize on
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the numbers they were bringing in.
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Right, right, right. They just simply weren't turning
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a profit. And and let's not forget that
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the companies get bought up by private.
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Private equity is not going to go by Microsoft.
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Yeah. So let's pause for a minute
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because I think we need to define what private equity is.
12:15
Not a bad idea. Public equity, although we tend
12:20
not to use the word public, but that's what we mean.
12:22
Public equity is, is buying and selling stocks on the Stock
12:28
Exchange, right? So anybody call up a broker and
12:30
say I want a share of whatever and you can buy it or you can
12:34
turn around and sell it. Private equity is investors
12:38
typically getting together a group of them and buying
12:41
something that is not listed on the Stock Exchange.
12:45
So it's actually very much akin to you buying a car or buying a
12:50
house or something. You know, you've got actually
12:52
got your own money. You go and you, you buy this
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thing. I think there are two really
12:57
useful ways to look at it and you've we've hit one of them
13:00
already, right? Private equity often sees a
13:04
company that's not properly valued, that there's more inside
13:10
the company than it would cost to buy the company, and the
13:15
rational thing to do is buy the company and sell it all off.
13:19
Yes. Pocket the pocket the profit.
13:22
Now, the second thing is that private equity often finds
13:27
inventors, entrepreneurs who have come up with something but
13:31
don't have the wherewithal to bring it to market.
13:33
Think every single episode of Shark Tank.
13:37
Right. Right.
13:38
This is exactly what private equity does.
13:40
They find things that might or might not make a fortune, and
13:46
they take their best shot and invest in what they think will
13:48
work. Yeah.
13:50
And one of the beautiful things about this, I I think of it as
13:53
an invention, which I think you should think of it that way.
13:56
The invention of equity allows for the first time those roles
14:01
of investor and entrepreneur to be separated.
14:04
I mean, think about it, without equity, if you want to start a
14:07
business, you have to be both. You have to have the idea, be
14:10
the entrepreneur, and you've got to have the the money to start
14:14
it. You've got to be the investor.
14:16
But with equity, you can have two different things.
14:19
So I could be particularly good at investing and making money,
14:22
and you could be particularly good at having an idea about
14:24
something, but you're horrible with money.
14:26
But put the two of us together and we can do wonderful things.
14:29
But you, that's what equity I would ask you to do.
14:31
Yeah. And, and that's a remarkable
14:34
thing. Yeah.
14:35
People almost always only see private equity chopping up
14:41
pre-existing corporations, right?
14:44
And that and Elizabeth Warren, for whatever the reason, has
14:47
some sort of nostalgic attachment to Red Lobster and Jo
14:51
Ann fabrics. I can't imagine why, given the
14:54
kind of money that that she's got.
14:57
I don't think Elizabeth was eating at Red Lobster, right?
15:00
This is just more nonsense for for her her.
15:04
Voters. Well, I'd say being a
15:07
politician, she has an attachment to failing
15:10
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15:13
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16:27
I don't have a big nostalgic attachment to much, right.
16:32
If I guess if a venture, if private equity kind of wandered
16:37
into Fenway Park and said, OK, we can, we can chop this up,
16:41
sell it off and get rid of it, I would be incensed beyond all
16:44
belief. But short of something like
16:47
that, no, I'm not. This is just a normal day in,
16:51
day out of business. If you're in a corporation that
16:55
is not making a profit and shows no hope of making a profit,
17:00
there's only a couple of things that are going to happen.
17:02
Yeah. Yeah.
17:04
Well, they're, they're all going to end up with you being out of
17:06
business. The question is what path you
17:09
take to get there. What path do we chop it up?
17:12
Do we just and and sell it off for parts?
17:14
Do we just leave it to die? And sometimes that's the correct
17:17
answer. You know, who the hell knows?
17:22
I but I don't see. I don't understand why people
17:26
think of this as a de facto negative.
17:29
No, it didn't. Let me lay it out more clearly,
17:32
maybe by saying, look what what private equity enables us to do
17:38
is to take take physical assets that's productive capacity that
17:43
is not being used in the best possible way and now transform
17:48
it so it is used in the best possible way.
17:50
Take a good example. There's a suppose you got a
17:52
building sitting down there and it's being used as a pizza joint
17:56
and the guy makes horrible pizza.
17:58
And you think to yourself, you know, I could get a bank loan
18:00
and buy that thing and put in a yoga studio and make lots of
18:05
money. And if indeed people want that
18:07
kind of thing, then by purchasing the building and
18:11
kicking out the pizza guy and starting a yoga studio, I am now
18:14
making a better use of that asset than was being used
18:18
before. That's a good thing.
18:20
Right. But but you missed the important
18:22
part when when you have to turn it into a yoga studio, you got
18:25
you got to get rid of everything that made it a pizzeria.
18:29
And you're not just going to throw them all in the garbage.
18:31
You're going to sell it all off. Yeah, I'm going to sell.
18:33
Same exact thing that happens when we talk about how how Red
18:41
Lobster is just going to disappear.
18:44
Well, yeah, the business will be gone.
18:48
All the things that were inside the stores are going to be sold
18:51
off to other businesses, right. Should we not, should we not do
18:55
that? Yeah, they're all going to be
18:57
sold off. Is there something wrong with
19:00
walking into the pizzeria and selling the ovens?
19:03
But it's not just the ovens. I think people are going to get
19:05
concerned about the workers. The workers are going to lose
19:08
their jobs to which are they are.
19:09
Well, on the one hand they are going to find jobs elsewhere,
19:12
which sounds callous, but it is the truth.
19:15
More importantly. They're going to lose their job.
19:17
They're going to lose their jobs anyway.
19:19
The thing is going to close. It's not.
19:22
This is the word our friends on the left love.
19:24
It wasn't sustainable, but this is going to make it sustainable.
19:29
Well, to make something else sustainable.
19:32
Right. Well, it's going to make those
19:33
assets, put those assets into a sustainable business.
19:36
To to some degree that will happen, but do you have any clue
19:41
when the negative connotation of, of this showed up?
19:45
I mean, I, I remember a day when we didn't think of things like
19:49
private equity. It was.
19:51
Those were words not in the vernacular.
19:54
Yeah, I, I recall back in the 90s, I was teaching MBA.
19:59
When did I forget his name? But he was His nickname was
20:03
Chainsaw Al. Yeah, Al Dunlop, the CEO of Sun
20:08
Sunbeam. Yes, yes, he bought.
20:10
Some, but that doesn't exactly fit because Sunbeam was a public
20:14
company. It was a public company.
20:16
It doesn't exactly fit, but what he was doing was going around
20:19
and buying up publicly traded companies and then selling them
20:23
off and he. Was he did.
20:26
Well, he bought. He bought things that were
20:29
failing and sold them off and the assets that are used better
20:32
until he didn't. Yeah, that's right.
20:35
Buying something and selling it off and you end up with less
20:38
than what you had to begin with. And that was the end of Chainsaw
20:41
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That's civl.com. I was a very poor graduate
21:21
student at the time, but I cobbled up every dime I had and
21:23
bought stock in Sunbeam. Yep.
21:27
Yep, the the minute I heard that he had been hired, I bought the
21:29
stock and I think I made 500% on it.
21:33
Something like that, right? And then it went all the way
21:36
back to zero and, and Sunbeam still kind of exists in name
21:41
only, I suspect. I think you can get Sunbeam
21:44
products from time to time, but this was a gigantic company that
21:48
every home in America had a Sunbeam thing.
21:51
In something right? And then they don't.
21:56
So I maybe that is I was thinking about Chainsaw Alice.
21:59
We decided to do this this topic and thought, well, that's not
22:03
private equity, but it's exactly how private equity behaves.
22:08
Right. Yeah, in.
22:09
Some in some circumstances, yeah.
22:12
And, and you started off by saying, you know, this is the
22:16
people see this side of private equity, they don't see the other
22:18
side. I've started six companies in my
22:22
life or been involved with starting of six companies.
22:24
And in each case we had private equity.
22:27
And the private equity is, it's now the part you don't see in
22:30
the news. They're the guys who come in and
22:32
make it possible for you to try out this idea.
22:35
They're they're investing. And you know, then they own a
22:39
percentage of the company, and from that point forward, that
22:42
percentage of the profits belong to them.
22:44
That percentage of the voting rights belong to them because
22:49
they bought that percentage of your company.
22:52
But more importantly, you sold that percentage of your company.
22:56
Yes, and that's where I wanted to go.
22:59
And it's a piece that just made me so mad about Elizabeth Warren
23:02
saying about describing this as if it's some sort of injustice
23:07
that these private equity people aren't buying up Red Lobster and
23:10
and selling it off and blah, blah.
23:12
As if they're walking in there with guns and taking the thing.
23:16
No, it's their money. It belongs to them.
23:19
They're freely offering it to the owners of Red Lobster who
23:24
are free to say no thank you. But they're saying, yes, I would
23:28
rather have the money here, take the Red Lobster.
23:32
So the only way Elizabeth Warren gets what she wants is by saying
23:37
no private equity. That money you're sitting on
23:40
doesn't belong to you. We, the government, should be
23:42
able to say what you do with it or saying to Red Lobsters owners
23:47
know Red Lobster doesn't belong to you.
23:48
The government should be able to say what you do and do not do
23:51
with Red Lobster. And frankly, it's ridiculous.
23:55
The the private equity people might be making a mistake, the
23:57
Red Lobster owners might be making a mistake.
23:59
But I'd rather have them make the mistake because they have to
24:02
live with the consequences than to have Elizabeth Warren dictate
24:05
the thing and make a mistake. Their mistake is none of my
24:08
business, nor is it any of my concern.
24:11
Right. Right, right.
24:12
That. But what politician ever said,
24:14
hey, that's none of my business. This is, this is.
24:17
These are not words we hear from politicians very often.
24:20
And let me talk to the people who will say, yeah, but I love
24:24
Red Lobster. Well, then go to Red Lobster
24:27
more often and we wouldn't be having this problem.
24:30
And to someone who says, well, to someone who would say, but
24:33
I'm only one person, I would respond, then you're in a
24:36
minority because nobody else agrees with you.
24:40
Yeah, and I I wish I had the number right at my fingertips,
24:43
but how many companies have just disappeared out of the S&P 500
24:48
over the years? Oh yeah, yeah.
24:50
I mean it, it's remarkable. You'd be shocked.
24:53
I, I was shocked when I looked it up once it, it was almost all
24:57
of them, right? That they just rotate right on
25:00
out and you realize there is no such thing as a business that
25:06
will last forever. Yes.
25:08
The same way, the same way. There's no such thing as a
25:12
government that will last forever.
25:14
Some are going to do much, much better than others.
25:18
Coca-Cola looks invincible, right?
25:21
McDonald's looks like it's probably about to go off a
25:26
Cliff. I I go to McDonald's and a value
25:30
meal of value meal costs $12.00. Well, I can go to fast casual
25:37
for 15, right? What am I going to McDonald's
25:41
for? And, and sooner or later, well,
25:44
McDonald's is going to fail. I don't know if this is the
25:47
time, but there will come a time because every business fails
25:51
eventually for one reason or another.
25:53
And that's a good thing, because in failing, it's making room for
25:58
new entrepreneurs and new investors who can do it better.
26:01
And how do we? Know there is the is the term we
26:04
use for. This.
26:05
Yeah. And how do we know they're going
26:06
to do it better? Because the reason McDonald's or
26:10
whoever it is was failing in the 1st place is because consumers
26:13
said I don't want to give you my money.
26:15
Anymore. Anymore.
26:18
That's right. And they can they can try to
26:22
change enough to get back into the market.
26:24
Sure, Burger King is always desperately doing this right,
26:27
trying to find a niche that they can serve, failing badly.
26:32
Apple back in the early 2000s was came very close to
26:35
bankruptcy. Yep, very close.
26:37
That's why Steve Jobs got got his old job back, because they
26:40
found out that nobody could do it but him and he turned it
26:45
into. Yeah, transformed our lives.
26:50
An unbelievable company, right? Not just a good one, but an
26:53
unbelievable one. I think it's drifted back down
26:56
to good. And you know, you see how these
26:58
things kind of shake out over time.
27:02
But, you know, everybody who's within the sound of our voice
27:06
has bought something from a company that they truly loved
27:10
that they can no longer get. And that's just the nature of
27:13
things. Yeah.
27:15
And for the people who are nostalgic, I would remind you
27:19
that whatever it is you have in your mind that you can no longer
27:22
get because the company is no longer there, I'm pretty
27:26
confident that whatever you're getting now in place of that is
27:30
way better. Generally, I think that's true.
27:33
But we all have things we miss. We all do.
27:39
Of course, when I think about it directly right this second,
27:43
nothing comes to mind. Yeah.
27:46
I I can't give you the list of things that boy, the world would
27:51
just be better if all these magically reappeared, because
27:55
most of the things, the thing that I would have said Once Upon
27:59
a time would be old arcade games.
28:01
Yeah, right, right. But but I I bought a system that
28:07
literally has every game from every arcade and every gaming
28:13
platform. It had it.
28:15
It cost me almost nothing compared to what I think it's
28:18
worth. And you could play it from your
28:20
desk. You don't have to get up and go
28:21
to the mall to. Yeah, that's right.
28:24
Orders. Which are probably now equal to
28:25
$0.50. It's it.
28:27
I play it on my 75 inch TV. Yeah.
28:31
Right, 7075 inch TV, right. And you, you see how these
28:34
things work over time. It's, it's ridiculous.
28:38
I mean, for God's sake, I, it's within my living memory that we
28:42
bought our first 30 inch TV. It it was a long time ago and it
28:47
cost $1000. Yeah, yeah.
28:51
Back when $1000 was a significant chunk of your annual
28:54
income. Well, the the college you used
28:57
to teach at which I graduated from, I can remember back in the
29:02
would have been the late 80s, somebody gave them gifted them a
29:07
flat screen TV that. Was I used to watch TV on it?
29:11
Yeah, it was one of the IT would be today, a medium sized flat
29:16
screen TV. 50 inch or so. 55 inch, yeah.
29:20
In this day, today, that TV would cost about $300.
29:25
Yes, that's about right, $300 and the gift at the time and
29:29
this. Was aware of the gift price,
29:30
Yeah. Yeah, at the time, and this
29:32
would have been the, I'm guessing mid 90s, maybe early
29:37
90s. But nonetheless, the price tag
29:39
on that was $10,000. $10,000. Yeah.
29:43
Yeah, crying out loud. But, you know, we're, we're
29:45
drifting far afield here. What do you do?
29:48
I mean, So what comes to be the question?
29:50
And I can't think of a damn thing.
29:52
I think private equity should be left alone entirely because it
29:56
it in no small part drives progress across the board.
30:02
I, I would agree with you, James.
30:05
I, I'll give maybe a little more color to it.
30:09
I think it should be left alone, but I think it should, if
30:12
government, if government has a role here, it's in assuring
30:17
transparency that all of this, the, the, the takeover, the
30:22
sale, everything should be above board.
30:24
There shouldn't be any backroom deals.
30:27
And that's how having it all above board assures that that
30:31
everything is done in the best possible way for for the
30:34
economy. Yeah, I can live with that.
30:37
That's a subtle violation of property rights.
30:40
I think you would agree, right, That if you have to fill out
30:43
forms and report on things, you can't just do whatever the hell
30:47
you want with your property. But we've decided in many
30:51
respects that property rights have to be well defined.
30:54
Yeah. And I would, yeah, I'm not sure
30:57
that I'm not sure this is a distinction without a
31:00
difference, but but I would say that it's not violating your
31:03
property rights. You can still do whatever you
31:05
want with it. What I'm controlling as
31:07
government is the flow of information about your property
31:11
rights. Yeah.
31:13
And I, I would, I would argue that every time you control the
31:17
flow of information, you do damage to something underneath
31:21
that information. Yeah.
31:22
And. I I don't.
31:23
And I'm with you. I don't think it amounts to
31:25
much. And I would I would agree with
31:27
the scheme. I would say, yeah, this is
31:28
probably the way to go. But let's just admit that it's
31:31
not perfect. Yeah.
31:33
And let me point out one other thing.
31:35
The public equity market is so heavily regulated that you might
31:43
well get less of this action happening on the private equity
31:47
markets. It might be happening on the
31:49
public equity markets if there was less, if the government had
31:53
less of a heavy hand in public equity markets.
31:56
Yeah. And we're never going to see
31:57
that, not in our lifetime. So no, no, and, and again, I,
32:00
I'm all for transparency. I think the government has a,
32:03
has a good role to play there. But where where equity markets
32:07
are concerned, I think the government goes well beyond
32:10
assuring transparency. Yeah, I think that's right.
32:14
And probably we've beaten this dead horse enough.
32:17
So I'll, I'll see you next weekend.
32:19
In the meantime, everybody out there, please just take a
32:23
second, take a minute, decide today how how are you going to
32:29
be nice to someone else, make it a game, try to find a stranger
32:33
and just be nice to each other for a minute.
32:36
Report back, tell me how you do.