Responding to cannon fire in the bay, the citizens of Melbourne armed themselves and gathered in Port Melbourne in September 1854, believing a Russian attack that media commentators had warned of was upon them.

Twenty eight years later, Melbourne's Age newspaper warned that "it would be comparatively easy for Russia to bring down an overwhelming force from the neighborhood of the Amoor without awakening the suspicions of the British naval officers at China or Japan." The city's populace was then stirred by a series of articles claiming to have proof of a planned invasion - allegedly deciphered copies of telegrams between the Russian Minister of Marine and a Russian Admiral.

But the cannon fire in 1854 was actually from a friendly ship, the Great Britain, that was celebrating its release from quarantine. And the telegrams of 1882 and stories of imminent invasion that surrounded them were a hoax. No invasion obviously ever eventuated. The Ballarat Courier described it as a "stupid and offensive affair".

Melbournians (or a portion of them) had taken what they read in the newspapers at face value. They may have considered newspapers to be a trustworthy source. Gold had been discovered and wealth created that others might be envious of. There was a feeling of isolation given the distance from Great Britain. Russian ships had visited Victoria as they followed the winds on a "great circle" route to get from Europe to the northeastern region of their vast country.

Information fragments

The tragic war that is being waged in Ukraine is generating volumes of information and disinformation around the clock. It is far easier now in the social media era than it was in the 1850s for investors to be exposed to incomplete fragments of the truth or deliberately misleading information that causes their imagination ro run away and make decisions hastily.

This Ukraine war triggered panic when Russia attacked a Ukrainian nuclear power plant, Zaporizhzhia, which is understood to be the largest nuclear power plant in Europe. Images of heavy fire led to fears there would be a melt-down on a scale greater than Chernobyl.

Not to underplay the potential risks of what is going on in Ukraine, the reality was in this case that it was a training building at the power plant that caught fire, not the nuclear reactors. And the experts tell us, with reference here to Bloomberg's reporting, that the reactors are "housed inside containment buildings that will protect them from plane crashes, tornadoes, bomb attacks, and explosions caused by the escape of flammable fission by-products".

Learning from Historians as well as from History

Students of history (the tales of Melbourne's Russian fears are sourced from this investor's long forgotten Honours Thesis in History) need to know how to research and dig for relevant information. But that is only half the battle. Historians must also be able to critically assess information. Who or what is the source? What was the intended audience? What motives and bias come into play?

These skills are equally valuable to investors awash in live feeds from around the world - especially when a social media algorithm may be pushing one particular blinkered view or perspective on them.

Author: Martin Pretty, Director 

Roger reveals the past market performance following major geopolitical or historical events since World War II. A discussion on the economic implications invariably begins with energy markets. Booming logistics has created an energy crisis driving oil, from negative prices just under two years ago, to nearly a hundred dollars a barrel today.  Commodities prices have also soared with Ukraine one of the world's larger exporters of iron ore.

Transcript

Roger Montgomery:

A week or so ago we wrote about historical precedents with respect to the equity market returns amid war.

The summary; equities tend to decline in the prelude to war and rise when the first shots are fired. When we have seen divergence from that historical pattern it is because there was no prelude.

Between 1914 and 1918, the period that defines WWI and between 1939 and 1945 - defining WWII - the Dow Jones rose 8.7 per cent and 7 per cent per annum respectively.  During the two periods that arguably define the worst military conflicts in modern history the markets rose.

Most-conflicts-since-then have been relatively short-lived. Have a look at this table courtesy of LPL Financial. It reveals past market performance following major geopolitical or historical events since WWII. The bottom line is, in the absence of a recession, the market appears to eventually shrug off conflict.

None of this is to diminish the very real horror of the humanitarian crisis unfolding in the Ukraine, the mounting loss of life and thousands of families and individuals displaced as they leave their homes and relationships for safety across the border.

For each conflict or crisis, investor uncertainty stems from the presence of elements that make it more unique (and worse) than those that preceded it.

With respect to Russia's unprovoked invasion of the Ukraine, we have, according to various press reports, an unhinged kleptocrat, with a finger on a phalanx of nuclear weapons.

Maybe this time is indeed different. And let's not forget investors were already nervous about inflation and rising interest rate before Putin's aggression.

Indeed, the prevailing inflationary climate may have had something to do with his timing. Booming logistics has created an energy crisis driving oil, from negative prices just under two years ago, to nearly a hundred dollars a barrel today. Commodities prices have also soared. US inflation hit a four-decade high and perhaps, Putin seized the opportunity thinking the west might be loath to impose sanctions that drive prices higher.

But the Ukraine is one of the world's larger exporters of iron ore and some 600 million people in Europe and elsewhere are fed by the country's agriculture sector.

Conceivably, Putin underestimated the West's determination to secure this important source of food and mineral commodities. But more important than letting commodity supply fall under Putin's control, maybe it is the West's determination to defend democracy that Putin has underestimated.

Keep in mind, the stock market can remain elevated for some time - even as a train wreck is obviously approaching. Eventually however it succumbs to a wave of panicked selling - much as a deer or rabbit transfixed by headlights succumbs to the vehicle careening towards it.

Investors need to watch for the point at which the Allied's words, sanctions and the supply of arms to Ukrainian civilians is inadequate to defend democracy and the Ukraine.

Putin's persistence - and it is clear his pride won't tolerate anything less - and the failure of diplomacy, would be negative for risk assets. A consequent delaying, by central banks, however, of both quantitative tapering and interest rate increases is a positive.

If diplomacy does succeed, the focus will return to inflation, interest rates and the risk of a wage price spiral.

In either case the possibility of a pronounced correction is one investors should be ready to take advantage of. If I was to make one prediction it is that in a several years' time, we will have seen a correction but we will also have seen peak inflation and the effect of automation on productivity and wages, which will be incredibly positive for high quality businesses, those with pricing power and those growing into their-potential-to-be-a-multiple-of-their-current-size.

Speaker:  Roger Montgomery, Chairman and Chief Investment Officer

Russia's invasion of Ukraine and the subsequent sanctions against it enforced by the Western world have enormously affected energy and broader commodity markets.

Russia supplies a substantial portion of the world's energy, food and metals needs. Although Western sanctions have been oriented specifically towards maintaining the continuity of supply for critical goods however, we have seen a strong 'self-sanctioning' effect amongst traditional customers of Russia. For instance, a commodity trading house may struggle to obtain the requisite insurance and finance to cover the purchase and transport of a shipment of Russian-origin commodities.

As such, almost overnight, we have seen an enormous uplift in demand for commodities of non-Russian origin to fill this sudden supply gap.
​
For instance, Newcastle thermal coal futures, an export-focused commodity, surged 46% overnight to close at US$446 a tonne. This is in contrast to prices of ~US$190 a tonne only 2 months ago.

The important Asian LNG benchmark, the JKM index, is currently trading ~US$35/MMBtu; significantly higher than in recent months.

In addition, the price of crude oil has exploded with the Brent benchmark currently trading at ~USD$116 a barrel vs USD$77 a barrel 2 months ago.
​
These circumstances have thrown up unique opportunities for Australian focused investors to capitalise upon.

Whitehaven Coal (ASX:WHC)
WHC produces high-quality thermal coal in NSW for export primarily to Japanese and Korean customers. Russia coal imports supply an estimated 15-20% of Japanese and Korean coal demand. Consequently, WHC's customers will likely be willing to increase purchase volumes from Whitehaven at higher prices than has been traditionally achievable.

In WHC's last half-yearly report, they managed to achieve an average realised price of AUD$211 per tonne of coal sold. With current spot prices over AUD$600 a tonne, we believe that Whitehaven is well equipped to capture these higher prices at greater production volumes than last quarter.

Adding to the attractiveness of Whitehaven is the commencement of a $400 million buyback, where it may purchase up to 10% of the company's share capital on-market. The debt-free balance sheet and high-quality assets make this a compelling value proposition at a market cap of less than AUD$4 billion.

Woodside Petroleum (ASX:WPL)
WPL holds a suite of Tier 1 petroleum-producing assets primarily located in Western Australia and the Gulf of Mexico. It has recently merged (subject to completion) with BHP's petroleum division and will be a global top 10 oil and gas (O&G) company in its own right. WPL is heavily exposed to the LNG markets, primarily exporting to Asia.

The company's realised prices for LNG and oil were USD$28/MMBtu and USD$80/bbl respectively. Accordingly, we see WPL as possessing strong leverage to higher O&G prices going forward whilst also paying an attractive dividend yield.

Santos (ASX:STO)
Santos holds a suite of O&G production assets located in Australia and PNG. Last calendar year, STO managed to capture realised prices of US$9/MMBtu for LNG and US$76/bbl respectively. 

Accordingly, there is a strong opportunity to capture materially higher prices given the current market conditions. We also expect that STO will reduce its stake in certain development assets which provide the potential for future capital returns along with its regular dividend.

Written By Emanuel Datt

The last two years has seen international travel upended, domestic transport challenged, 'essential services' redefined and a growing interest in the role infrastructure can play in decarbonisation. With this backdrop, does the case for investing in global listed infrastructure still stack up? 

It was a bad month for markets all around, as the US Federal Reserve finally leaned into its job - getting inflation out of the system. Its mechanism for doing this is to raise rates to curtail demand. This impacts share markets in two key ways. First, relatively higher interest rates will be less stimulative for economic growth, which feeds its way through to corporate profits and therefore valuations. Second, higher interest rates mean higher costs of capital to business (debt and equity). All else equal, higher costs of capital will reduce the present value of a company's cashflows and therefore its share price. And the further out (in time) those cashflows are, the more they are discounted, meaning that share prices of companies which are not profitable now are very badly hit.

The chart below shows -23.8% underperformance of the Russell 2000 against the S&P500 over the past year. Just over half of that underperformance was notched in the past three months. The Russell 2000 is an index of small to mid cap US companies which generally carry less financial strength - and so may be of less quality - than the larger companies that dominate the S&P500.

This is a big divergence in outcomes for higher quality companies compared with lower quality companies, but it's even worse than that for some funds and many companies, some of which are down -50% or more. 

Economic growth is only part of the story

It is more than likely that rising interest rates will temper some of the stellar growth we are seeing in companies - this is of course incrementally negative for share markets. However economic growth is not the only ingredient for success in the companies that Loftus Peak holds. We believe a larger part of the success of our holdings is driven by secular trends resulting from changing business and consumer behaviour towards better, more efficient tools and solutions. So higher interest rates might change the pace, but not the destination. It is even conceivable that some of these trends accelerate and become more ingrained during a period of depressed growth as companies look to boost profitability by cutting costs, including by automation, moving to the cloud and cutting ineffective legacy advertising.

Quality takes centre stage - profitability, cashflows, balance sheets

We never shy away from highlighting the quality of the portfolio. Irrespective of macroeconomic conditions, this has always been an integral part of the portfolio construction process, and was a decision informed by the numerous corrections and crashes the investment team has witnessed over their lifetimes.

Loftus Peak invests in disruptive companies; businesses driven by secular trends and structural change. The portfolio is therefore heavily tilted towards companies with differentiated, non-commoditised products and services, resulting in business models with relatively higher margins and better profitability. In an inflationary environment, which it appears we are heading into, greater differentiation and higher margins means the ability to pass on or even absorb increased input costs. The same cannot be said for many traditional businesses that are capital intensive and run on razor-thin margins. 

A key component of a quality company is one that is generating positive cash flows and has additional cash on the books for good measure. Why is this important? As monetary policy tightens and interest rates go up, economic growth will temper at the same time the cost of capital begins to increase. This can be a lethal combination for companies that haven't yet established their business models or a path to profitability, because plugging the hole with debt and equity raisings is going to become much more difficult (and costly).

It is for this exact reason that a majority of Loftus Peak's holdings are in quality companies - those with established business models, strong balance sheets and cashflows, with a much lower allocation to 'riskier' companies. This has always been the case, but in more recent months we have increased the tilt to quality even more than usual. 

The portfolio's quality tilt

We realise that our focus on quality might mean we sacrifice some additional upside when things are going well, but it also ensures our investors are protected on the downside as the dust settles and the market begins seeking out companies that are strategically positioned, with solid fundamentals, positive cashflow generation and strong balance sheets.

Despite the short-term volatility and underperformance of a select few names, we believe the Fund is well positioned for a period marked by slowing economic growth and rising costs of capital because of the inherent characteristics of disruptive companies and our portfolio construction process, which leans heavily toward strong balance sheets and business models, so is high on quality.

Despite macro headwinds, disruption marches on…  For Tesla, competitors are coming

Tesla is currently valued at more than double that of the entire global car industry (excluding itself, or course). While not wishing to in any way minimise Elon Musk's inestimable impact on these car makers (and the fossil fuels on which they run) it is simply not credible that the existing industry will not fight back. The table below shows the market share of the top ten car makers by production of electric vehicles. Generally, these sales represent only a small fraction of the car companies' overall output across internal combustion engines, but the takeaway is simple - Tesla has just 20% of the total market share in EV's worldwide.

Take VW as an example, which since we wrote in our piece title "VW's car accident; don't waste a crisis"  in Sept 2015, now has 10% of the battery electric vehicle market share. The company has not one but two battery technology pioneer companies in its orbit - Quantumscape and its US 24M, the latter of which is reportedly capable of energy density (kilowatt hours/kilogram) around 50% higher than Tesla. As we said in our piece .

Another data point: The Wall Street Journal in January carried a review of BMW's new electric 4 series. "After a couple hundred kilometers soaring across Bavarian fairyland, here's my capsule review: glorious. Sweet, swift, swank, swell, fast as hell, hushed as a chapel, cool as marble. With its front and rear e-motors providing a digitally mastered 536 hp to the wheels, the i4 M50 accelerates like Derby Lane's electric rabbit-0-60 mph in 3.7 seconds. It's too bad earlier generations of car reviewers have squandered the phrase "corners like it's on rails," because the i4 M50 really does."

December quarter earnings highlight the resilience of secular trends

Last month we wrote extensively on the importance of semiconductors as the bedrock for much of the disruption and secular trends we are witnessing. Since then, many of our semiconductor companies have reported strong results driven by robust demand in their respective end markets (consumer - phones, cars, other devices - industrials and more). Many of our other core holdings - still beneficiaries of semiconductor advances - such as Apple, Amazon, Google and Microsoft all reported results that beat the market's subdued expectations.

It is positive results like these that add to the conviction we have in the long-term secular trends we are exposing our clients to. Although the short term might remain volatile and uncertain, we believe that over the medium and long term the safest place to be is in quality companies riding secular tailwinds.

As a reminder, those secular tailwinds include 5G and the Internet of Things, cloud computing, digital advertising, ecommerce, streaming, electrification and importantly the semiconductors underpinning it all. We do not believe the strong results will end here.

Roger Montgomery (00:07):

It is February 2022. And over the next few minutes, I'm going to address the question that is probably on the minds of most investors at the moment, and that is the interaction between inflation, short term interest rates, and equities. And what we'd like to do is present an argument that suggests that consensus may have their expectations with respect to inflation and interest rates wrong. If that's the case, then there is a very good argument for buying some of the beaten up stocks that have seen their PEs contract substantially over the last month or month and a half. With that in mind, it's very important to appreciate that we are going to be mentioning some individual company names.

Roger Montgomery (00:56):

This isn't a recommendation to buy those companies. In fact, we recommend only that you take personal professional advice. The last seven months or so has seen a substantial step change in interest rate expectations as a consequence of the appearance of inflation in the United States and around the world. You can see on this particular chart going back all the way to July last year 2021, that green dash line is a representation of where interest rates were expected to be back then. And you can see that since then moving to the blue line, not only have our interest rates expected to be higher, but they're expected to move sooner and more steeply.

Roger Montgomery (01:44):

And that really has been a very dramatic change in expectations in the market. It stems from the very hawkish fed rhetoric that's coming out of both the FOMC, the Federal Open Market Committee meeting and Jerome Powell himself. And the question is, is this troubling and should investors be concerned at the moment? The expectation is that there are probably going to be more than four interest rate hikes this year. Many investors see 2022 as a transition year. I want you to remember that expectation of four rate hikes, or even five rate hikes this year, which is currently appears to be priced in to markets, because we're going to assess the legitimacy of that or the opportunity that it presents in just a moment.

Roger Montgomery (02:36):

Now, it's really important to understand that since the late 1970s, there's been a huge number of studies that have shown that in periods of inflation and also during periods of rising interest rates, PEs contract or the multiple of earnings that investors are willing to pay for a company contracts. And that is the case without exception as you can see in the lower chart here, those gray shaded areas represent periods since 1980, where the 2-year yield in the United States or 2-year US Treasury yields have increased. And that coincides with periods in the top chart where PEs have contracted, and that happens without exception. So, rising interest rates means PEs contract and inflation also results in PEs contracting.

Roger Montgomery (03:29):

In fact, the greater the inflation, the greater the contraction in PEs. You can see on this particular chart also since 1982 to the present, not only is there a negative correlation between interest rates and PEs or equity multiples, but that correlation is somewhat exponential. Now, this is really important to understand, because what it means is that the lower interest rates are the greater the move on in PE, or the greater the contraction in PE for a given increase in interest rates. And that's why investors need to be particularly careful about what we've dubbed the profitless prosperity stocks. They're the stocks with profits pushed way out onto the horizon with no clear line of sight becoming profitable. Roger Montgomery (04:20):

They're the ones that tend to be most sensitive to interest rate increases or prospective interest rate increases. But of course, because they've contracted so much in terms of their PE, that could also be an opportunity which we'll address in just a moment. In Australia, we've seen that PE contraction occur substantially. Just in the month of January, in fact, from January the fourth, you can see there are companies like Pro Medicus and Transurban and Reese, ARB, IDP Education, Corporate Travel, REA Group, for example, all very high quality companies. And they've seen their PEs contract from between 14 per cent and by almost a third 33 per cent, in fact, contraction in price to earnings multiples.

Roger Montgomery (05:09):

So, people are willing to pay substantially less for these businesses, in many cases, very high quality businesses than they were just a month or month and a half ago, but the outlook for companies is very different to what their share prices have been doing. We know that share prices are far more volatile than business operations and the changes in business prospects. And you can see this survey from GLG conducted in early 2022, survey of 471 global CEOs, and 68 per cent of those CEOs believe and are very confident or confident that their revenues will grow over the next 12 months. So, what we've seen is this potential setup for great opportunity for investing, because we've seen PEs contract amid short term fees about interest rates and inflation.

Roger Montgomery (06:03):

But meanwhile, the underlying companies are reporting that they're confident or very confident in a large case of those surveyed, confident or very confident that their revenue are going to grow. So, businesses are continuing to grow. They're continuing to profit, they're continuing to demonstrate bright prospects, and yet their share prices have contracted substantially. So the question remains is, is this an opportunity? Well, before we answer that question, just have a look at the contraction, or think about the contraction that we've seen in the Fed's assets or in their balance sheet. We know that we've seen quantitative easing and that's tipping over to quantitative tapering now.

Roger Montgomery (06:54):

So in other words, the US Federal Reserve is buying fewer government bonds each month than what they were buying previously. And what you can see in this chart is that not only as we mentioned earlier, is there a relationship between rising interest rates and contracting PEs, but there is also a relationship between equity market returns and a contracting US Federal Reserve balance sheet. That relationship demonstrates that as the Fed contracts its balance sheet, as it goes from quantitative easing buying bonds in substantial amounts, to reducing the number of bonds that it buys, or the amount of bonds that it buys, and then to contracting its balance sheet, where it actually shrinks the balance sheet, rather than grows it at a slower rate.

Roger Montgomery (07:42):

You can see that corresponds to returns on the stock market. The greater the balance sheet expansion, the greater the returns in the stock market. The greater the contraction of the balance sheet, the greater the negative return in the stock market. And that corresponds with a very simple idea that the higher the price you pay, the lower your return if you're paying very high prices for stocks. Then in the future at some point, you're going to end up with a lower return, particularly if you bought or paid high prices for stocks, when the US Federal Reserve's balance sheet was expanding. Now all of this, the prospect of rising interest rates in 2022, as well as a balance sheet contraction looks very similar to 2018.

Roger Montgomery (08:26):

In 2018, the US Federal Reserve hiked rates four times, and they contracted the balance sheet by about 10 per cent. So, Jerome Powell's hawkish statements recently offers a very similar prospect for 2022. Now, what we have to remember is back in 2015, we had an oil meltdown and a nominal recession in the United States. In 2016 and 2017, the economy then began recovering. The US was growing at about 3.8 per cent. We had Trump's tax cuts, and the economy was thought strong enough to support four rate hikes. For 2018, the conditions however weren't strong enough to support the Fed's four interest rate increases. The Fed arguably went too hard and that produced a stock market correction late in 2018 and importantly, that saw the fed stop raising interest rates.

Roger Montgomery (09:24):

Now for 2018, the US S&P 500 returned minus 7 per cent, after that stock market correction. And the Fed backed off. What's interesting is though that action of backing off raising interest rates actually saw the S&P 500 generate a 30 per cent return the following year in 2019. So, what is the possibility that the really hawkish statements we're seeing out of the US Federal Reserve now actually coincides with peak inflation fear, or even peak inflation? Is it possible that inflation has already turned the corner, and that we see lower rates of inflation in the future, which then sees the Fed pivot its current policy or current rhetoric to a more dovish and less hawkish rhetoric? Well, here's what the bond market thinks.

Roger Montgomery (10:18):

If you look at the difference between treasury constant maturity, securities, and treasury inflation index securities, which gives you an inflation break even curve, you can see that yes, expectations for inflation have risen slightly over the next 10 years, but it still remains steeply negative. That curve is steeply negative. Meaning, that inflation is seen by the bond market, at least as not persisting and in fact, temporary. I think about that in the context of what the bond market has actually had to absorb. They've seen 7 per cent inflation, which is massive in the United States. They've digested the possibility of four or five rate hikes from the US Federal Reserve.

Roger Montgomery (11:00):

They've heard tougher talk from the Fed, and there's also political pressure to deal with inflation. And despite all of that, the bond market remains firmly convinced based on this curve that inflation is a temporary phenomena. And in fact, it's not going to persist at all. In the US of course, inflation is on the front page and inflation has been very high there. And the reason why inflation is fastest in the US is because of course, the US offered the most stimulus. US employment cost index at the moment is rising to 4 per cent. Owner's equivalent rent has jumped to 4 per cent. Oil's just broken above $90 a barrel. So, there are real fears of a wage inflation spiral.

Roger Montgomery (11:46):

Look, there's no question that inflation in fact is running high at the moment. You can see it on this chart for the US, and it's running high in the US and Europe, but I wonder whether or not it could actually flame out. And in fact, there are some signs at the moment that the supply disruptions that have been partly responsible, or largely responsible for the jumping inflation are starting to ease.If you look at this chart here, you can see that supply deliveries and backlog of orders are actually starting to decline already. Sure, there's still supply chain problems. They're not going to disappear overnight. But at the margin, we're seeing the overall strain in the supply chain start to ease as this chart demonstrates.

Roger Montgomery (12:28):

And that coincides with this chart of the ISM manufacturing prices paid index, which is already tipping over. We know that prices for container freight, dynamic random access memory, German natural gas, Chinese thermal coal prices, for all of those things are already starting to decline. So, if inflation is primarily a supply side disruption and government stimulated consumer demand, or the result of those things, then it's quite possible these things aren't going to continue. And of course, if we open international borders, we'll see spending diverted to services again or travel, and that means lower demand for goods. And that we'll see some of the price pressure on those goods start to ease.

Roger Montgomery (13:10):

So, it's possible that inflation has actually peaked at the same time that the US Federal Reserve rhetoric is ramping up and causing all those fears in the stock market. And why is this an opportunity? This is an opportunity, simply because if you look at what the indices have done the S&P 500, our small caps index, if you look at the NASDAQ 100 in the United States or the NASDAQ Composite, you can see they've all fallen, but underneath those falls are much more substantial falls for individual issues. You can see on this table that something like 42 per cent of S&P 500 companies have fallen by more than 10 per cent, even though the S&P 500 has only fallen 3 per cent. You can see in the NASDAQ, for example, 79 per cent of companies have fallen by more than 10 per cent, even though the index has only fallen 7 per cent.Roger Montgomery (14:00):

The same story is true here in Australia, and that presents a host of opportunities. If you can find businesses that are still increasing their net worth, or increasing their value by generating high rates of return on equity, growing their equity by retaining profits, that process takes years to build value, yet the stock market abandons its long term plans, investors abandon their long term assumptions for companies and worry about the short term when interest rates are expected to go up, and inflation has been running in a million miles an hour, but there is an argument as I've just demonstrated that inflation is already peaking, that we'll see consecutive lower rates of inflation in the future.

Roger Montgomery (14:39):

And the Fed will ease its rhetoric around inflation and interest rate rises. If that happens, then the stock market could very well bounce quite violently. In fact, as violently as it's recently fallen, and that sets up investors for a terrific opportunity for 2022. Thanks for your time, look forward to talking to you again soon.