COIN - CashFlow Hunter On Catalyst Hedge Investing Coinbase 3M Schwab And UBS

2023-05-01 13:10:00 ET

Summary

• CashFlow Hunter returns to discuss launching his new Investing Group, Catalyst Hedge Investing.
• Coinbase not evolving from early mover status in crypto; Bitcoin a solution looking for a problem.
• 3M not a difficult short, dividend at risk.
• Special situation stocks; Charles Schwab and UBS.

Listen to the podcast embedded above or on the go via Apple Podcasts or Spotify .

CashFlow Hunter was on the podcast in March unpacking his prescient call on Silicon Valley Bank ( SIVBQ ). He returns to discuss:

• 2:00 - Launching his new Investing Group, Catalyst Hedge Investing
• 12:35 - Coinbase ( COIN ) not evolving from its early mover status in crypto
• 17:00 - Why Bitcoin is a solution looking for a problem
• 19:10 - 3M ( MMM ) not a difficult short; dividend at risk
• 30:20 - Special situation stocks
• 34:20 - Charles Schwab ( SCHW ) makes money in a lot of unappreciated ways; [[UBS]] - Don't bet against the Swiss government.

Recorded on April 26, 2023

Transcript

Rena Sherbill: CashFlow Hunter, super excited to have you back on Investing Experts. Thanks for coming on the show.

CashFlow Hunter: Thanks for having me. It's great to be back.

RS: It's great to have you, and exciting news for the Seeking Alpha audience or for CashFlow Hunter audience. Would you share with listeners what you have going on at Seeking Alpha? And what exciting news you have to announce?

CH: Absolutely. We are launching Catalyst Hedge Investing Investment Group. Very excited, a lot of work has gone into it. And hopefully we will have -- try to build a very dynamic, intelligent community. I think intellectually curious, fairly experienced sophisticated investors.

RS: That sounds like a nice setup. What are you looking to cover? What would or what should investors be looking forward to? What are you kicking around over there?

CH: So, I think the central offering and it's one of the sort of a differentiating offering for the site is that I am a hedge fund portfolio manager. And I attend quite a few hedge fund networking events, either conferences or idea dinners and stuff like that where hedge fund, analysts, portfolio managers and traders, they get together and they talk ideas. I know there's no collusion obviously, it's all Tom Ferry above board, very carefully, everyone's very careful on how they conduct themselves. But that is how a lot of ideas get tossed around the hedge fund community.

And I attend quite a few of those types of events. It's a very good source of new investment ideas, both long and short. And hoping that -- so I can bring that idea flow to an investor community that is intellectually curious enough and experienced enough to appreciate a well thought out long or short investment idea that really was put together by a fairly experienced professional investor.

RS: It's nice to hear intellectually curious is still a market these days. Cheers, cheers to the intellectually curious. They're still keeping that flame alive. Nice to see that community develop -- remind listeners what the full name is going to be.

CH: Catalyst Hedge Investing. Most hedge fund ideas or quite a few hedge ideas are -- there is some catalysts to unlock the value, whether it's long or short. Something, if it's a long, it's something that's going to make a stock go up. And if it's short, something's that's going to make a stock go down. And so that's the catalyst part. And the hedge part is running long and short. So I think it does nice. While, it's a bit of a mouthful, it does a nice job of describing what the service offering is going to be.

RS: And then you're going to be sharing ideas, you're going to be chatting. They're going to be able to ask you questions? What does it look like? How's it going to work?

CH: Yeah, that's a great question. So like a lot of other investing groups, the bulk of the ideas or articles that I write, I've probably said that the best ideas are going to be only for subscribers. And there are quite a few names of which I might be the only analyst or one of two analysts. So those ideas will be staying behind the paywall.

And then really, what I'm hoping is -- and because I've been a part of these types of networks before, is having a very active and lively chat board, where I post ideas that I heard at an idea dinner. Maybe I haven't done all the work on it, but I can at least just post what I -- the list of name companies that were discussed. I can give a few thoughts here and there. Really, like I said, I haven't done the full -- enough work to do a full write up on the name. But I can throw those names out there, and with this to moderate a conversation on them.

I've already put that -- some ideas from an idea dinner I attended last week into the chat room. And so I’ll be doing that and then also be really happy to interact one-on-one individually with individual subscribers. Then I will -- they will have exclusive access to me. I will not be responding to one-on-one to inbound messages anymore. I get quite a bit of those actually. So unfortunately, people want to interact with me, it's going to, yeah a big part of the subscriber pool.

RS: Yeah, as the analysis gets more top shelf, the access is included in that. Is there an increase in people reaching out to you since the Silicon Valley Bank call?

CH: Oh, yeah, yeah, it's been a sea change, really, of people who have reached out to me. Some people have just been very nice and sort of congratulating me on a good call. But I've also had quite a few people reaching out and just asking my opinion about things. I'm happy to do that. But if someone's paying extra for a subscription service, they're going to get a premium access to me. And so that's -- I'm going to be restricting that.

But really, I'm looking forward to mostly not just to interacting with individual subscribers on a one-on-one basis, but really also having a really lively chat board with, like I said, I think -- what I've been told by a lot of people at Seeking Alpha is that my followers tend to be the more experienced, or however you want to describe, sophisticated investors on the site. People who might have the most assets to manage and act and manage them the most actively, rather than just buying ETFs or buying individual stocks. And so that's great.

I really do appreciate having a more sophisticated follower. And I'm hoping that the subscribers, and the chat board will be a forum for individual subscribers or individual investors who are more thoughtful to interact with one another as well.

RS: I'm always saying to anyone who will listen, that one of the things I love best about Seeking Alpha is the commenters, because the conversation is such, you're speaking to this sophisticated investor. I think the commenters are by and large -- it brings forth quite a fruitful conversation. And given that experience, I would imagine -- although I'm curious, I would imagine that it helps your analysis as well as you helping other people's analysis. I imagine that feedback loop is very beneficial for everyone.

Have you had comments where you are rethinking something that you were certain of or something to make you rethink something?

CH: Oh, absolutely. That's a really great point. So I tell people who ask me why I do these articles, why I even bother engaging with some of the comments. And some of them are a little rude, particularly if I call for a short on a company that someone's long and likes a lot. But anyway, so I write up these investment thesis , because one, it helps to write something out to make sure that the check that when you write in and out, does it really make sense? Does it pass your own internal sniff test?

Secondly, one of the things I do get quite regularly, comments from people or direct messages from people who are following a company that I've written about, who might just know a factoid that I just didn't get. One of the downsides of being a portfolio manager and typically a generalist portfolio manager, I mean, there are a lot of upsides to it. But one of the downsides versus a sector analysts, all they do is cover, say 10 names, is you're not going to know necessarily everything about a company that you write about. And frankly, even if you are a sector analyst, and you only cover 10 names, you still stand a really good chance that you're going to miss a factoid here and there. And I definitely…

RS: Analysts are a fallible people. Is that…?

CH: Yeah, imagine that, right. And so I have definitely gotten some very, very useful feedback and some really interesting data points. Not just when I read the article, but it could be weeks or even months after reading an article. And I'll get a little notification, so and so commented on your article from December or whatever. And it'll be a development from a company that I just missed. And but it could be truly meaningful. And I've definitely seen that. The Coinbase short that I posted has been a case in point, I've really gotten some really, really useful commentary, and very helpful data points about Coinbase that I -- maybe I'm aware of and/or maybe I missed or I would have seen it eventually because people call to my attention in real time. And that's incredibly helpful.

And frankly, it's also -- it's also good to hear the other side of an investment thesis. If it's someone just having a temper tantrum, because they don't like the way I described something or just because I took the other side of them. That's not helpful, obviously. But if it's somebody who has a thoughtful, opposing view of a company, that's very helpful. I have as an investor, one thing, you have to be is humble and you have to be open minded. And you have to be willing to admit, hey, maybe you're wrong. And if somebody has a thoughtful point, poignant point to make that can make you reconsider your point of view, then that's helpful too.

RS: Yeah, absolutely. Speaking to the intellectually curious, it's better to be curious and humble than right. And I think it oftentimes leads you to being evolutionary right, if not right in the moment, but I think it sets you on the right path. And speaking to the long and short picture, your recent public articles on Seeking Alpha speak very much to looking at both sides of the market.

And I was going to start with your more recent article , but because you started with Coinbase ( COIN ), and I'm interested to hear kind of what you were -- what helped your thesis on that? I'd be interested to hear -- you had a strong sell on that at the end of March. Interested to hear how you're thinking about that today. And maybe how you're looking at that sector even.

CH: Yes, so my thinking has definitely involved evolving -- continually evolving about crypto in general. But regardless of my views on cryptocurrencies, as an asset class, I am fairly convinced that Coinbase was an early mover in the crypto trading space that has really not evolved. Or at least they haven't evolved with the marketplace or the marketplace has really just evolved. Ask them -- the biggest issue I have with them is that their take rate -- not a word for commission is over 1.5% per side per transaction. So if you --- there's $100 worth of bitcoin traded, they take on $1.5 from the buyer and they take $1.50 from the seller.

I mean those kinds of commissions just don't exist anywhere. So if you buy $100 of Bitcoin and then you sell $100 of Bitcoin, you end up paying over $3 of commissions to Coinbase. And you can do that transaction on like Interactive Brokers or a really a number of other brokerage services for significantly less, significantly less types of commissions that are commensurate with stock trading commissions, which makes sense, right?

It's a fairly commoditized product at this point. Now if you want to trade some of the lesser known currencies that have a moniker that I don't -- probably not to use a lot [indiscernible], then maybe Coinbase is going to be the place for you to do that. But the bulk of the volume is Ether -- and -- Bitcoin and you really just -- you just don't need to be paying such egregious fees to them. And then they also have this massive overhang on the SEC and can really come in after them. And one thing I've learned in 25, 30 years doing this, the government really wants to make your life hell and shut you down. They're going to figure out a way to do it.

And these guys have taken the strategy of saying, the government's coming after them and they're going to then poke the bear, rather than saying, okay, what do you want us to do? And I think that's really going to not serve them very well in the future.

RS: And what did you pick up that was useful, or that elucidated something that you weren't maybe aware of or paying attention to?

CH: Well, look, I mean, the crypto space is a little complicated. It's a little confusing, frankly, still to me. So the people who will clarify certain terminologies or certain thesis , people will have -- they'll alert me to certain volume increases or decreases on the Coinbase network. They'll give me updates on what the SEC is talking about doing. It's just there are a lot of different inputs into that situation. And unless you're just following it constantly, it's really hard to keep up with it on a minute by minute basis.

RS: Yeah. We had Kirk Spano on a few -- I guess a couple of weeks ago at this point, and before that as well, talking about how he likes Bitcoin in the crypto space, and really doing a deep dive into why he likes Bitcoin specifically, as opposed to any of the other coins or anything else in the sector. Anything that you would share or care to share in terms of your views on Bitcoin, or crypto or how investors can or should be looking at that space?

CH: Well, like I said, my viewpoint on Bitcoin is evolving. I generally still view it as a solution, looking for a problem. I think they're a lot of really, I guess, the term is [indiscernible] uses for Bitcoin, relatively bad actors utilizing Bitcoin for not the most legal of purposes. But look, that said, there's been an awful lot thrown at Bitcoin over the past 6 months to 12 months, and it's still around. So, I struggle to see how it has a lot of intrinsic value, but that doesn't really matter.

One of the first things I saw in business school was this whole study on how diamonds don't have any intrinsic value. There's a lot of diamonds out there. The flow of high quality diamonds, is controlled by a very -- what an entity that would be considered a monopoly anywhere in the United States certainly, the De Beers, but they've managed to control the flow, and so on. Diamonds have rare rarity and they have value because people want them and they have -- they have a rarity even though it's an artificial rarity. So why can't Bitcoin be the same like? I don't know if that holds up. I don't know if that holds up. I really don't.

I don't own any Bitcoin personally. But again, my view on Bitcoin doesn't even matter. And it's not even necessarily pertinent to my views on Coinbase. I think Coinbase really just -- its service is not particularly valuable. And they still charge fees as if we were the world is 2015 not 2023.

RS: Speaking of selling and being bearish on a stock, we're going to stick for a second on the bearishness, if we may. Your most recent article on 3M, you want to give listeners a taste of how you're thinking about that stock and why you're so bearish on them?

CH: Absolutely. So unlike Coinbase, which whips around and can be very painful to be short, because if bitcoin goes to the moon, Coinbase goes to the moon, regardless of what has actually happened internally at Coinbase, 3M's ( MMM ) actually a significantly easier short , because it's a sleepy industrial company. No one's going to think that 3M is disrupting the world with anything. Their most recent quarter -- they have four business lines. Their most recent quarter, all but one of them was negative organic revenue, and if you [indiscernible] with significant add backs, that I don't know if it necessarily should be adding back at you, but their only business line that had a positive organic revenue growth was healthcare. And that was right around 1%.

So this is not a high growth business. So, should I step back and say, okay, this is a low to no growth, maybe potentially shrinking industry industrial company. And most signs I say, and I've written about this on Seeking Alpha, is that the economy is slowing, at least from an industrial production standpoint. The Philly Fed numbers are continuing to be terrible. There was a pump -- one of the Fed's, Federal Reserve branches reported economic activity, I think Monday, and it's really, really bad, recessionary type numbers.

So at the very least, you have low to no growth industrial company entering into recession. It's typically not a great environment for them. So I think that a lot of people own 3M because they pay a fairly hefty dividend. But I think that dividend's at risk. And there are a couple of reasons for that. One, they are trying to spin off their healthcare business, making that bill, that it will garner a multiple expansion. And that the multiple expansion that that will garner separated from the rest of 3M will offset the multiple contraction that you will likely see at the rest of the core business, whatever is left.

I don't know, I walked through the math, in my write up of how I think that's a bit of a stretch. That would be, I mean, actually you can make the argument and I did my piece that separating the company out might actually depress the overall valuation of 3M, break up the two companies. But if they did rid of -- they will spin off the healthcare company, likely that the dividend would be unaffordable. And would people look at the combined dividend power of the two separate entities? Perhaps my experience is people usually don't do that. So if they did spin off the healthcare company, I think that dividend would be at risk.

But that aside, I think that there are two very large, looming liabilities that act as catalysts, again, going back to the catalyst meme, of -- that could really destroy a tremendous amount of value, one of which could actually pressure 3M so much that it went into bankruptcy, or at least wiped out a lot of equity value. So one is they have earplugs that they sold to the military. I laid out all kinds of reasons why I thought this was going to be a major problem for them. There have been 16 lawsuits that have gone to trial, 3M's lost 10 of them. And some of the verdicts haven't been, in the -- I think one of verdict's over $100 million.

So these are very big liabilities. And it's a super politically unpopular thing to have going on. Right. I mean, you sold our men and women who are defending the country, you sold them faulty equipment, and now they have hearing loss. I mean, that's not a good place to be. And if you're a company, right I mean, what are you going to say, here's five grand. Thanks. And that is basically what they are saying is there's a $1 billion liability. And there's 200,000 soldiers who have hearing loss, five grand is not going to cut it. I think it could be -- it could be at least 10 times that, which is $10 billion, and potentially 20 times that.

So which would be $20 billion. If it's $10 million, look that takes the company from 2.5 turns of leverage, which is probably low investment grade. That will hurt their cost of capital. Not to mention it would wipe out over a year's worth of EBITDA, two years worth of free cash flow. But the really big hit has gotten to be from this PFAS liability, which are these forever chemicals. It's the stuff that basically went into scotch guard, is these chemicals that are [indiscernible] 30s that never break down. 3M has produced them for upwards of 90 years.

The major problem for 3M is that it was used in fire retardant foam. And that stuff got sprayed everywhere and then leached into over 3,000 water reservoirs in the country, water utilities. And the EPA on March 14, put out a preliminary ruling, saying that they are considering to labeling PFAS as a hazardous material. And that the only -- the safe content of PFAS in a water supply is four parts per trillion, down from where a lot of these water utilities have 70 parts per trillion.

The cost of getting from 70 to 4 is, estimates are somewhere like -- potentially like $300 billion. And the real depth now is if EPA gets a hazardous material ruling, or they're allowed to call it hazardous material, they can then declare water supplies that have too high of a content as the Superfund site in which case, they just say do not pass going to that $200 and just pay me. So there's only been a trial. And if you ever deal with the EPA, very difficult to appeal to those guys.

So, there is a trial starting in June 5. I think it'll probably wrap up by the beginning of July. And I think the news flow from that trial, it's like a few water districts in Florida are getting together suing 3M for the cleanup costs. And I just think the news flow from that's going to be really, really bad. And so if 3M -- if the liability is -- I think it could be easily north of $20 billion potentially north of $30 billion. If it's north of $30 billion that's over half of the current market cap. If they had to pay it upfront, that would severely stress the balance sheet, potentially knocking them into bankruptcy.

And then the other real risk is that you would have so many different claimants coming after them for cleanup. The only way they would be just in litigation hell forever. And the only way to get all those claimants into one pool would be that they can then negotiate with, would be going through bankruptcy. So this -- we've seen this before. We saw with asbestos. Pretty much every company that ever produced asbestos either filed for bankruptcy. I think, over 70 companies filed for bankruptcy, including fairly large companies like Owens Corning and Grace. And it took a while for those guys to clean up their liabilities.

The opioid companies, many of those had this -- unless they were really big companies like J&J ( JNJ ), they had to end up filing for bankruptcy to again get all the claimants into one pool that they could then negotiate with in a more rational, negotiated settlement, within a more rational form.

RS: I mean, the bearish case certainly seems quite compelling, would you attribute it mostly to a case of short sighted management overall?

CH: I think management's kind of caught between a rock and a hard place. It's going to be really hard for them. This current management didn't start making these four chemicals. In fact 3M is getting out of the PFAS business. I think they're going to shut it down by 2025. They announced that in December. They're going to take a pretty big charge in the sphere as part of that.

It's sort of -- and they dropped into a really gnarly situation. And I think they're probably doing their best.

RS: Well, like this management paying the price of a short sighted management if it's not this specific management... Or it's like what you're saying is history has caught up to a faulty system.

CH: Yeah, it's sort of history caught up. I mean, I think -- look, the asbestos guys, I mean, I think some of the asbestos guys, when they first started making it, in that '20s or '30s, says I don't think I did any wrong with this. And what do I know? The question is they've continued to make it even though the data now is coming out that this PFAS they cause kidney damage, they are potential carcinogenic. There's all kinds of problems with that. You and I probably have PFAS in our blood. I mean, it's literally everywhere.

RS: So where's the good news? Where are your rose colored glasses settling on these days? I know that there's a few stocks in a few different sectors if people are looking at your recent Seeking Alpha articles that you have your eye on, that you like. What are some names or some sectors or some places that you're liking these days?

CH: Yeah, well before I get into that, I mean, there is another company. So, I released the 3M article broadly. I'll be writing about another company that I think has very high PFAS liability. It's also a potential bankruptcy candidate. But that will be staying behind a high paywall. So that'll probably get published tomorrow afternoon, or if not Friday morning. But it'll stay behind the paywall. So anyone who wants to learn about another short along the same lines, you have to subscribe.

And as far as companies that I still -- that I like it, a lot of what I've been following has been stuff that's more special situation oriented. So look , I think broadly the markets are in a little bit of a scary place. We're headed into what I view as the recession. I think the market is -- the S&P over 4000. I have seen quite a few estimates, S&P earnings are going to be well below $200 this year. So S&P trading, if that's true, the S&P is trading well over 20 times earnings , go into recession then, with potential budget impasse in Washington in June. I don't know. Doesn't sound to me, like it's the greatest, most propitious time to be in buying just the general market.

And I think the general market has been driven higher predominantly by a handful of large tech companies. Their earnings have been pretty good. But a lot of the buying power, and I saw a report from Goldman Sachs yesterday, saying that a lot of the buying power behind this rally didn't come from -- it come from CTAs which are all quant driven. And they bought like $180 billion worth of stock over the past 30 days. And that they're sort of max 100% long, right now. So a lot of the buying power has left the market.

What was interesting today is, Microsoft ( MSFT ) is one of the largest components, if not the largest component of S&P these days. And Microsoft had a huge day. And the S&P was still down. So, Microsoft up 7%, the S&P is still down today. That's not a great sign for the market.

So I've really tried to focus more on situations that I think should be uncorrelated to the market. So one of the situations I think is very interesting is this company called Syneos Health ( SYNH ).

I wrote about them as a potential buyout. I didn't come up with some of my own. There was a Dealreporter article out there two weeks ago that laid out that -- not that it named the banks that Syneos Health hired to conduct the sale process. It named several people, several firms that are in the second round of the bidding process, for the company.

And what's interesting about that is two of those bidders are one's Advent ( ADN ), the other one is Thomas Lee, the firm called Thomas Lee. And both those companies had sold companies into what is now Syneos. And they both have carve outs in the bonds, that if they ultimately buy the company back, there's no change of control position in the bonds. So that gives them an advantage into advancing a takeout deal.

So I liked that businesses as just a standalone business. I think it's very interesting. I don't think there's much downside if no deal materializes. And I think there's really nice upside if a deal does materialize. So I love those situations where you say, okay, well, if I'm wrong, and nothing happens, this may be $5 of downside and if I'm right, something good happens, there's $20 to $25 of upside. Those are the risk reward ratios that you do really look for, at least in the hedge fund community.

RS: As we're kind of coming to the end of this conversation, and it's not the last one I hope for this…

CH: I would love to. I love coming here.

RS: Same, same, same. So one of the things that I wanted -- we touched on it at the beginning of the conversation in terms of Silicon Valley Bank, and we had you on talking about the fallout and we were talking about some financial stocks last time you were on. And we've been coming back to Charles Schwab ( SCHW ) on the show, and especially with recent earnings that were up in the past couple of weeks. How are you looking at that space in the market and thinking about either big banks or regional banks or the financial sector at large?

CH: I think if you're a long term investor, you want to own JPMorgan ( JPM ), something -- some franchise like that. That's really just a world class wonderfully run franchise. It's just a money machine. You're probably okay there. I mean I'm not saying that JP Morgan, where's that trading these days? It's at 135. Sub 10 times earnings. You're probably not going to get hurt long term owning JPMorgan.

The smaller regional banks are priced as if they're going out of business still. First Republic ( FRC ) seems like it's on death's door. And that they might be going out of business, actually.

But look there are going to -- I'm sure there are small regional banks or medium sized regional banks right now that are priced as if their earnings are going to be pressured for quite a long time. And really that might be true. It's really hard. But there you can buy some of these franchises at a third of book value, assuming that their deposits don't run out the door and their loan books don't have major problems and their cost of deposit do not smooth their earnings to nothing. You probably can do okay.

Ben Graham, who wrote The Intelligent Investor and was Warren Buffett's professor at Columbia said that if you buy something at 30% of book value mathematically, you're going to generally do okay. Banks maybe is a little bit more difficult than that, because their business is so fleeting.

I still think though that, being like Schwab , it’s just a world class enterprise. It's really -- it's basically too big to fail. And their earnings might be pressured for a little while as deposits cost them a little bit more. But Schwab makes money in a lot of different ways. And a lot of different ways that I think a lot of average investors don't really appreciate. And I don't really see that position changing until I started seeing a lot of accounts really closing and Schwab keeps opening new accounts.

So I think it's going to be okay. The other one I wrote about was UBS ( UBS ). And look, that's you're basically buying the country of Switzerland. I don't think you want to bet against the Swiss government. And you're buying it at a 20% discount to tangible book value. And that's a pretty good place to be. And they absolutely stole Credit Suisse. Unbelievable deal they got, and they got tremendous, tremendous support from the Swiss government.

What I mean by this? And I also wrote an article that we'll be posting, I think, Friday or Saturday, another interesting little strategy about buying warrants on companies that de-SPAC that bought other companies. I generally think the SPAC space is awful. It's been a terrible value destroyer over the past couple of years. But I think like I said last week, last interview, if you pick through the detritus of things, you can find the little nuggets that have been thrown out. And some of these little nuggets there are a handful of SPACs that were actual real businesses, they have real balance sheets, they have real cash flows. They have real business strategies that I think are at least viable. And they are very likely takeover candidates.

I mean, these are companies that were bought for $10 a share a year ago that are now trading at $1 a share. And the operations haven't necessarily deteriorated. And there's one -- there's a little quirk in the structure of the SPACs in the warrants that if a company gets bought out for more than a certain amount of cash that the warrants have to be redeemed. So there's an article, it's going to be going out broadly over the next couple of days. I've already submitted it, and I'll be breaking down a list of SPAC warrants that I think are particularly juicy, that a lot of these SPAC warrants could return somewhere between 100% and 700%, if in the right situation with relatively low risk over time. And I'll be writing about those in a series that'll also be behind my paywall.

RS: So much sifting to do in the market, so much sifting to do as investors.

CH: Yeah, you have to pick your spots carefully right now. Like I said, most economic activity I see is not good. The banks, I think there's a tremendous amount of pullback of credit availability, which is generally not good for the economy. And yet the S&P broadly is trading at a pretty big multiple. That's --- you got to be careful.

RS: Absolutely, absolutely. I went on a hike recently in nearly 100 degree weather and somebody kept saying, keep your eyes open, be safe. And I think as investors we would do wise to heed the same advice. The service is called Catalyst Hedge Investing. Anything that you want to leave with investors before we temporarily say goodbye?

CH: No, I hope people consider subscribing to the service. I am not looking to be the biggest subscription service, only the best. So I'm looking for thoughtful, intellectually curious investors who like interacting with me and like interacting with each other. So very hopeful that people will take a look at the offering. And if they have any questions, I'm happy to respond to any of those.

RS: Yeah, I personally always appreciate people taking serious looks at what they're analyzing and I think you are showcasing what a serious look you're taking at the stock market and stocks and how you're thinking about things beyond just the numbers picture, but also the bigger picture, macro and micro together. And I know listeners are affording themselves a lot of benefits from that.

So, appreciate you coming on this show. Look forward to the community you're building on Seeking Alpha with Catalyst Hedge Investing. Until next time, appreciate this time.

CH: Thanks so much, Rena. Talk to you soon.

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