Investing Unscripted Podcast 100: A Chief Investing Officer Explains Private Equity

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Jason Hall: Hey everybody. Welcome back to another episode of Investing Unscripted, where we ask and answer the hard questions about investing. I'm Jason Hall joined as usual by my very good friend. You've been promoted, Jeff. Very good friend. 

Jeff Santoro: I've been upgraded. I'm usually just a good friend. This is nice. 

Jason Hall: That's right. That's right. Very good friend. Voice of the people. Jeff Santoro. How are you, buddy? I am doing great. How are you? I'm good. I'm good. I'm excited for two reasons. One reason, we have a wonderful guest who's going to be on. It's going to give us some interesting insights. We're going to bring that guest on in just a minute, but this is a special episode for another reason too, Jeff.

Jeff Santoro: It is this is actually our 100th official episode. We've done actually more than a hundred if you count the first Friday [00:02:00] live streams and also some of our rough cuts. But as far as like scheduled, planned out purposefully recorded, 100. So that's a nice little landmark for us. So it's exciting. 

Jason Hall: A century of episodes.

I love it. I love it. We as usual, we also have a century of housekeeping. What's our what's our housekeeping, Jeff? 

Jeff Santoro: It's all the normal things. Just encouraging everyone to reach out with, with questions and show ideas. We've actually gotten some decent, a decent number of ideas for shows from some listeners recently.

So keep those coming. If you have any questions you want us to answer on the next mailbag, you can email us or hit us up on social media at any point. We keep a running list of questions so that we have a lot to answer when we do our mailbags. And as always, ratings and reviews on the podcast apps are very appreciated.

All right. 

Jason Hall: How about uh, reach into the green room and we'll bring our guests on. 

Jeff Santoro: Yeah, let's, let's let's go. I'll go get them and then you can introduce them. 

Jason Hall: Okay. 

Jeff Santoro: Sounds good. 

Jason Hall: Well, while you're going to get him, I'll go ahead and, and read him in. I am [00:03:00] excited to welcome Tim Hanson to the show. Tim Hanson, who is the co president chief investing officer at Permanent Equity.

Prior to that, spent some time at Motley Fool Asset Management is a smart man a knowledgeable investor, and somebody has some really interesting insights. Also, Tim, my favorite thing about you that I get to experience is the little newsletter that you do every day. How are you Tim? 

Tim Hanson: I'm good. Thank you for being a subscriber. That's been a fun, a fun project to do over the past year. 

Jason Hall: Yeah, well, let's talk about that because you are you're in season two as you call it season three. Is it oh, that's right. That's right. The way it's structured. It's technically season three and it's unqualified opinions is the name of it, right?

Unqualified opinions And I encourage people to find it and to sign up for it because it's a lot of fun. So, before we get into your background, this is a question that's not on the script, that wasn't on part of our outline. Why, and, and you've talked about it a little bit in the, in the, in the newsletter. But why in the hell did you decide to commit to doing something where you're basically writing just about every day for most of the [00:04:00] year? 

Tim Hanson: Well, two things, two things personally after I kind of, after I turned 40, I decided to challenge myself to see if I could try to find something interesting to say every day.

And in order to say something interesting every day, you have to do something interesting every day. And so that's sort of been my, my, my personal challenge and it doesn't work out every day. But it's been fun to try to try to get after it. You know, and then secondarily, you know, at Permanent Equity, you know, we we invest a lot of time and, and money and resources in content because we believe content scales conversations and in our neck of the woods and in our line of business you know, relationships matter, you know, we, we think of the three pillars of our business as being capital.

Opportunities and then people, talent and all three of those things are, in our opinion, just made so much easier to access and build relationships with if we're scaling conversations through, through content. So that's why, you know, we've got the daily newsletter. It's why Brent, our founder and president CEO, right?

So much. We go on podcasts, we have books, we have drawings, you know, we just want to be out [00:05:00] in the world. And if we're, if we're out in the world and we're out in the world every day talent and opportunities tend to find us rather than us having to go look for them. And, and, you know, I think we're going to talk about this a little bit later, but that's the big difference between private investing and public investing.

For me, at least it's public. All those opportunities are listed and everybody can go look at them in private. There's no list. You got to go, you got to go dig them up somehow. 

Jason Hall: Well, another thing too, about doing something every day. And if you try to do something well, every day, you get a little bit better at it over time.

And that certainly can pay off. I'm sure. 

Tim Hanson: Yeah, you can't, there's no substitute for reps, you know, and anything, whether it's investing or sports or, you know, you just got to do something over and over and over again. And when you do it enough, you know, it gets easier and the results get a little bit better.

I hope 

Jason Hall: let's talk about your, let's talk about your, your background a little bit there. So I mentioned you spent some time at the Motley Fool, Motley Fool asset management for a while you were there. Over a decade, I believe. And I think you've been at Permitted Equity for going on six years. Yeah. A little more than 

Tim Hanson: five years here in Missouri.

Yeah. Prior to that, I was at [00:06:00] the, I was at the Fool from, let's see, it was 2005 to 2018. And I was in asset management, the regulated business, but also had an opportunity to work for the publishing side, work on the website. I did some copywriting you know, when I got hired, and you probably know the history of the company.

Well, maybe not everybody does though. When I got hired in 2005. You know, they were rebuilding after the dot com implosion. And so it was a really fun time to be there because they were kind of figuring out the business model and everybody got to wear a lot of hats. And that's something that I've, something I like to do professionally.

And it's one of the reasons I, I, you know, joined Permanent Equity five years ago was just the opportunity to do, do a lot of different things rather than, you know, have to stay in a lane. So 

Jason Hall: when we have, when we have guests on too, we like to connect the human element here too, from being somebody that's a pro in the investing world and the asset management world and the capital allocation universe to how did you get there?

The little, little boy, Tim, where did little boy Tim come from? And how did you, what's your origin story? How did you end up in this world that we all live in? 

Tim Hanson: [00:07:00] Yeah, it's, it's funny. It's funny. We had a running joke here. So I, when I originally. Came out to Permanent Equity. I was hired in as the chief financial officer of the CFO.

And Brent's joke about me was that I was the most underqualified CFO in America, because I have a fairly alternative background with regards to, you know, financial and investing stuff. You know, like a lot of people who work at the fool, you know, my, my initial Exposure to investing came through my dad.

My dad was a scientist, but a hobbyist investor and built spreadsheets on the weekends and tracked his stocks and so on and so forth, and so it just kind of got imbued in me at a young age that you could go out and you could buy businesses and businesses could do productive things with your money and then you'd make more money.

So that, so that was fun, but my interest, I mean, my interest coming out, I don't know how far you want me to go back. My interest coming out of high school was, was writing and government, and I ended up going to school in DC. Which is how I found my way down there. I graduated in 2003, which was still kind of reeling from The job market at that point was still reeling a little bit from the dot com stuff and then also September 11th.

And so I [00:08:00] ended up, you know, I got exactly one job offer and it was in government as a, as a speechwriter and I took it and within gosh, six months of doing it, I realized that politics was not. Was not for me. And so I started looking around for other things. You know, my major in college was playwriting, but my dad made me get a minor in something more practical which was, which was financed.

And so I was a little bit dangerous with numbers. And so, combining that interest, you take an expert 

Jason Hall: with words and give them just a little bit of enough to be dangerous with numbers and. 

Tim Hanson: Yeah, no, that's, that's exactly it. You know, we say in one of the letters recently, you know, it's one thing to have a great financial idea, but you also have to be able to convince people of it.

That is, that's a good idea. So they, they take it. So that was kind of my accommodation and, you know, I, I had when I was working in government, obviously, you know, it was making money and they had a retirement plan and I was putting money aside and that's how I found the fool was just kind of looking around for helpful advice.

And when I realized they were local to DC. And I wanted to kind of switch gears at a government. I [00:09:00] applied for just a kind of a, I think the job title back then was like fact checker and you know, just kind of work on everything and got that job stayed there for, you know, 13 years helped worked on some of their research publications, helped launch the and run the asset management business.

And then my last job there was working with some of the software developers and our team and data scientists, just kind of like ingest data. From all of the analysts at the company to figure out, I mean, fundamentally, we were trying to answer the question, like who was lucky and who was good. And if you were good, what were you good at and how might you get better?

And it was in the course of doing that, that I think my, my epiphany was that I thought it was becoming harder to find edge in the public markets. Like multiples were going up. Momentum was becoming a more important factor to returns. My passion had always been like small companies and emerging markets, like weird, kind of out of the way niche stuff.

And I, you know, I met Brent Morgan Housel introduced me to Brent because one of the business development things we were doing at the time at the fool was [00:10:00] wondering if we should, within the asset management business startup money, a private equity fund, which might use the subscriber base. As a source of proprietary business acquisition opportunities.

We never did it, but that was how I met Brent was doing kind of project based research around that market initiative. Brent 

Jason Hall: saw Brent Beshore, the CEO and founder of Permanent Equity. Right. 

Tim Hanson: And you know, they're out here in middle Missouri buying small companies. I'm trying to make them better. And it just seemed like the opportunity to add value.

You know, we've got four pillars that we can add value in our business, which is, you know, we can source proprietary deals. We can negotiate proprietary price and terms, and then we get to run them post close or help run them post close and staff them with people. And so there's just more levers to pull than you see in the public markets.

And so that, that, that, those combination of factors are what prompted the transition from, you know, D. C. and public equities to Columbia, Missouri and, and small private companies. 

Jeff Santoro: So that's a perfect segue to what I wanted to ask about, Tim. So, we talk a [00:11:00] lot about public investing on this podcast a couple months ago we had Joe Maguire on to talk about venture capital, and you live in the world of private equity now.

So, as someone, as the person on this podcast who has the least amount of experience with investing, I was hoping you'd give us, you know, all the listeners By a very, 

Jason Hall: very, very long, long 

Jeff Santoro: measure. I was hoping you give us all a quick, maybe 30 second primer on like, what is private equity? Because I think if you're a newer investor, you hear that term thrown around a lot.

And I don't know that it's super clear what it is. And then maybe even go a little further into what, what you guys do at Permanent Equity that I, that's a little bit different than maybe the traditional private equity you might hear about. 

Tim Hanson: Sure. I mean, so, so private equity comes in a million different flavors.

And it's, it's mostly just, you know, investors who identify Pools of capital that they then deploy in novel ways into businesses that are private. And so there are far fewer for the most part rules and regulations around that. Most of the investors. Who are making investments in private equity are going to [00:12:00] be, you know, qualified investors or institutional investors.

There are fewer individual investors making private equity investments, which in some ways is sad because it's an interesting opportunity set, but you know, the government wants to make sure people don't get taken advantage of because when there are less rules, there's also more latitude for people to do, to do bad things.

And, you know, you guys probably are aware, like. You know, public stocks are considered a level one asset, right? Which is if you have a share of Google, you can type it into the computer, know immediately what it's worth. You know, everything that we are transacting in is what's considered like a level three asset, which means there are no observable inputs into what it's worth.

So you get to build a model and you get to make up the number. And, you know, we try to be intellectually honest about that. But candidly, some people so, so that's one thing, you know, historically private equity, you know, you, you've got like that, yeah. Barbarian at the gates, you know, history, it's funny 

Jason Hall: cause that was actually the, I was going to mention that too.

That's the image that most people have, right? The leverage buyout, giant private business, and they're just trying to do one thing and that's [00:13:00] trying to buy something As cheap as they can with as little of their own money as possible. 

Tim Hanson: Yep. 

Jason Hall: And then as soon as they can within a few years Polish that turd, sell it for a higher multiple and send the debt off the door with it.

Right. That's what they're trying to do. The best leverage returns they can get 

Tim Hanson: and then take their carry. Exactly. Right. And so, you know, historically, you know, and it's not, it's not a perception because it's wrong. You know, there's a lot of leverage, people being aggressive about cost cutting. You hear a lot of horror stories about, What people do within a private equity strategy, but that's not private equity writ large.

It's just, you know, it's, it's a strategy within the universe of private equity. So, you know, it's 

Jason Hall: the splashy part that it's, if it bleeds, it reads that ends up on the W Wall Street Journal. Right. For 

Tim Hanson: certain. And I mean, you know, when they hit home runs, they hit really big home runs because when you use a lot of debt and you get multiple expansion, you're able to make the business better, or you're able to do attack on acquisitions and things you can create.

You know, a big, a big exit. And that's what, that's what a lot of private equity firms are in the [00:14:00] business of doing, which is, you know, spend three years trying to buy something three years trying to build it and run it, make it polish it, as you said, and three years trying to sell it and be done. You know, we do things differently.

So our, our, Kind of mission statement here is that we wanna just help more American small businesses stay independent and thrive. And so we take a, a view of being very long term and we use no debt. So, you know, people who know us know, you know, our funds have 27 year durations. We have 10 years to invest the capital that we've raised.

We charge no management fees of any kind, and we only get paid when we make distributions of excess free cash flow. Back out to our investors. And so we're aligned around trying to make, you know, really smart, long term decisions to gradually grow these businesses over time. And the solution that we're trying to provide to the marketplace is, you know, right now, there are, you know, thousands and thousands of small businesses, small and medium sized businesses.

These are businesses that are earning probably somewhere between 2 and 25 million dollars a year that are being run by people who may [00:15:00] have founded them or a second generation family member who really don't have a transition plan, but they care deeply about their employees. They care deeply about their community, their customers.

All their stakeholders. And so they want to figure out how they can transition into retirement while also maintaining the health of the business and put it in a safe pair of hands. That's going to, you know, not lever it up, not flip it in three years not compromise their standing in the community.

And so we're able to offer those folks a very differentiated value proposition. When it comes time to do that. And like I said, you know, because of our content and whatnot, a lot of them find us And they say, Hey, I own a business. Would you mind taking a look at it and see if it's something you'd be interested in?

And so and we love that because ultimately money is a factor. But when we like it, we like it when money is not the only factor. So we try to be competitive and fair on valuation, but we wanna Win a deal on the merits of other stuff, which is it's a great fit. We can be helpful. You know, people, the, the seller cares what happens next.

And so if you go through our portfolio, which is on our website, you know, [00:16:00] there's, there's stories behind each of those about, you know, why we got that deal and somebody else didn't. 

Jason Hall: So how much, and this is just kind of a making of the sausage question, but I'm curious because I know typically with, with private equity a PE firm, or maybe a more than one might work together on deals, depending on the size, they fully acquire a business.

Is that typical of, of what Permanent Equity does? Are you, do you co invest? Do you partner with owners and buy a stake? Is there a mix of it? 

Tim Hanson: We have, we, we, you know, we think of our, our product as, as money for lack of a better term, and our customers are sellers. And so we offer them kind of two solutions.

One, we call the legacy buyout. This is typically where we're buying somewhere between 80 to a hundred percent of the business and the leadership either wants to retire in short order or within a few years. And so we're trying to figure out what that looks like and how we transition leadership as they go into retirement.

Secondarily, we have what we call the growth partnership, and this is because, you know, you know, not having a long term time horizon and not using leverage isn't [00:17:00] something that only older people are interested in. We found that people of all ages can be interested in it of the right mindset. People are, you know, travels well in different geographies.

You know, a lot of private equity, smaller private equity firms will have like a southeast focus or a northeast focus. You know, our businesses all over the country because people are coming to our, our value set. And so a growth partnership is typically a, a founder who's going to be between the ages of, you know, call it 35 and 55.

They want to stay with the business for the next 10 to 30 years, but they're looking for someone, they probably want to take some chips off the table maybe because, you know, they've got a family or they've got colleges to pay for and all their assets are wrapped up in one investment, which is the, which is the business.

So they want to bring in a helpful partner. But not someone who's going to, you know, again, lever it up or, or change the way that the business is run. And so in those cases, we're usually buying somewhere between 51 and 70%. We always take a control position just because, you know, because we have a 27 year horizon, we can't be a passenger, we've got to be a, be a driver.

But you know, our, [00:18:00] our partners are all incented in the same way. Like I said, we've tried to build everything around distributions of access, free cashflow. So So that if we choose to take our cashflow and reinvest it, you know, our investors are foregoing their return. We're foregoing our fee and the CEO is foregoing a bonus in the hopes that that cash is going to be reinvested at high rates of return.

But if we pay the cash out you know, that's what we bonus our CEOs on. We then take our fee and obviously our investors get their return. So that's kind of how the, how the business model works. 

Jason Hall: So thinking about that versus I mean, it's, it's, we've kind of already answered in the conversation, but I think just to kind of lay it out there for those that didn't hear, I'll, I'll mention this too.

And want to just mention it again, try to mention it every show when we have an interview, especially Go to investing on scripted. com and sign up for the newsletter and you can get the transcripts when we drop a new episode. And for this one, all the things we're talking about, there'll be links throughout it that can be helpful.

So we did the interview with Joe Mayger, Tim, and one of our former colleagues at the Motley Fool as well. Spent a lot of time in Australia and has since transitioned [00:19:00] into venture capital. We talked about it a little bit in that interview with Joe, but. Thinking about venture capital versus private equity.

And again, there's lots of flavors of private equity, but venture capital, you're clearly looking to invest, to supercharge a business, to have an exit point when that business goes public or is acquired. Your model is really about building and strengthening a business that the intention is for it to remain private.

Tim Hanson: Yeah. Yeah, for certain. I mean, our hope we've tried to build our firm almost like a, like a, like a family. Which is to say that, you know, it's, it's, we want to hold these things for a generation or more. We want them to be durable and we want them to generate free cashflow that then gives us optionality.

You know, we can either distribute it and buy beer with it, or we can reinvest it and continue to help grow the business. So it's, it's, you know, it's a different model. You know, I, I, I, you know, we love it and we think it's, it's, it's really rewarding. But you know, other people, you know, do, do things differently.

Venture capital is, you know, obviously a form of private equity, right? They're making [00:20:00] investments in private companies, but certainly, you know, much earlier stage companies, much smaller initial bets, but they've got, you know, very high optionality and variance. Their batting averages are going to tend to be low.

Our batting average should be higher because we're buying much more mature cashflow and proven assets. You know, but we think. You know, at the end of the day, you know, investing is about having a job and then and then getting it done. 

Jeff Santoro: So quick follow up, Tim. It sounds like one of the biggest, if not the biggest thing that your company can or your private equity firm can bring to the table for a potential partner is money.

But I'm wondering, like, what else, what other kinds of things, if I'm a private, if I'm the owner of a business and I'm trying to work out a deal with, with your firm, what are some other things that you guys can bring to the table that make it an attractive partnership for a small business owner?

Tim Hanson: Yeah. So, so our chief operating officer is Mark Brooks, actually also came, came from the Fool. I recruited him out here after I came and told Mark that, You know, this is pretty fun and he'd enjoy it because Mark's a big business operations geek. And, you know, we've got [00:21:00] our businesses and they would not begrudge me saying this.

We have a lot of businesses or a lot of problems for them to solve, or they have a lot of problems that need to be solved. And so, you know, well, it's 

Jason Hall: funny how a lot of those problems, you start with money, right? Money gives you the capacity to solve them. It frees up time. It frees up resources. And then we've got Mark and this is where the expertise that you have comes in.

Tim Hanson: Yeah. So we try to, you know, what we say is we're trying to buy businesses that are excellent at their core business. So our pool builder is really good at building pools. You know, our market tech firm, Minnesota, they're really good at, at helping small businesses advertise on the internet, you know, but where we help is what we call the tastes like chicken layer of business.

So, you know, we call that marketing we call that financial management and kind of scorekeeping. Hiring and and those are things that for many small business owners, they view them as cost centers. Like, why would you like pay someone to hire for you when you can just ask around town and see if there are any candidates available?

You know, our pool business out in [00:22:00] Arizona they advertised a lot on the radio and not on the internet. And we said, why don't we try running some tests on the internet? Because we can find, you know, people in Arizona. Who don't have pools yet and have young kids and we can target them in April, just as the temperatures are warming up and that highly targeted advertising turned out to be really successful.

And they got a lot more leads as a result of that. You know, we've been able to play CEOs in many of our businesses. You know, we've sped up. The time to close books at our picture frame business up in Michigan from like four weeks to two weeks and the ability to make a decision based on having accurate financials two weeks earlier than you did previously.

I mean, it's a huge win in terms of having to run the business. You can buy less inventory, which frees up more cash. You have less working capital. So those are areas where we try to be really, really helpful. And, and good partners. And, you know, like I said, prior to our involvement. They tend to be viewed as cost centers, so they're not really invested in, which means that they're, you know, they're brute force problems to solve.

But when you probably, you know, when you solve them, [00:23:00] you get a good, good payoff. You know, we get asked a lot like, Hey, what's your competitive advantage? What's your, what's your special sauce? And it's not, it's not rocket science. You know, we, you know, we, the ethos around our firm is You know, say what you're going to do and do it and be highly reliable and kind.

And that, that's it. 

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It sounds like people are getting business expertise with, with you guys, you know, like, so if I'm a, if I'm the pool owner, I might be really good at building pools, but not necessarily marketing or advertising or that kind of stuff. So. 

Tim Hanson: Yeah. Or you're just, or you're just trying, you know, you're a small business CEO who's trying to wear seven hats.

So even if you might be a good marketer, Yeah, you're spending 11 percent of your [00:25:00] day on it and then you're trying to do HR over there and negotiate with the landlord over there. You know, things just fall through the cracks. It's not a full time job. 

Jason Hall: Well, one of the things you talked about in your recent, just kind of tying into that in a, in a recent Newsletter write up is that even really great small businesses.

I'm paraphrasing a little bit, but even really, really great small, medium sized businesses are anything from a few months to just a few weeks of trouble times away from absolute catastrophe. So it sounds to me like a lot of businesses are looking to partner with a firm like you guys, they're, they're looking for a little bit of margin of safety too.

Tim Hanson: Yeah. You know, you know, it's one of those things where, you know, these are small businesses, so they're inherently fragile in the sense that there are single points of failure. You know, they're not running around with 10 billion of liquidity on their balance sheet with facilities with Goldman and JP Morgan.

They can just draw on the event of a crisis. You know, during COVID the, you know, obviously the paycheck Protection PPP loan program had lots of issues and problems, but, you know, for many businesses, it was a real lifeline just because, you know, they [00:26:00] had three months of cash, but the pandemic was definitely gonna last longer than three months and nobody knew what was going to happen, you know, on the other side.

So, you know, we, you know, we, one of the things we do. You know, right off the bat with our businesses is we audit all the reporting that they generate, you know, and, and if they're not generating, you know, daily, weekly, monthly cashflow forecast, you know, we have a template that we immediately build for them to, to, to work on that.

Cause cash is the lifeblood of any business. You know, we have a concept around here, which we call like, you know, unconscious reinvestment or inadvertent reinvestment. You know, and this is an example where, you know, the, the person in charge of AR. Goes on vacation and nobody picks up the job for a week.

And all of a sudden your, your cash conversion cycle just lengthened by 10 days and now you're 150,000 short, or, you know, one of your, you know, we've seen this recently at a number of our businesses where larger public companies, obviously who are customers you know, the cost of financing things has gone up, right?

So if you can squeeze your small supplier and pay them in 75 days, instead of You know, [00:27:00] 30. That can be a real boon for these companies and their own balance sheets. And if you're not paying attention as a small business, you're inadvertently financing all of these other businesses from your own balance sheet.

And, and that hurts, that stings. So we, you know, we try to make sure every month we look at, Hey, what did we quote unquote make on paper? And then how much cash did we actually get in? And if there's a difference between those two numbers, like how big is it? And can we explain it? And if we can't explain it, we will be just unconsciously reinvested in the business.

Let's figure out where that went and how we might fix it. 

Jeff Santoro: So we, we eventually want to turn the conversation to you as an investor too, and how your switch into private equity has kind of informed the way you look at investing generally. But I have a question about Something you just actually hit on, which is higher interest rates.

I'm curious what impact higher rates have had on, on the private equity side of, of investing. 

Tim Hanson: Yeah. So, so, our experience in our segment of the market, and I don't want to speak broadly cause there's a lot of different segments of the market, but in our segment of the market you know, [00:28:00] we have seen if you rewind two to three years when interest rates were really low people who were trying to sell their businesses were getting very aggressive offers with regards to valuation.

And getting a lot of them when they came to market because there were a lot of firms with access to relatively inexpensive other people's money. And so it made for a very competitive environment, but it also made for a very large and broad opportunity set because, you know, brokers and intermediaries in the space could very credibly go to a small business owner and say, Hey, There's never been a better time to sell.

You're going to get a lot of offers at good valuations. If you fast forward to today, you know, we, since we don't use debt at all, you know, our value proposition hasn't changed. So we're still underwriting things in the same way. And, but instead of the competition now being other firms, our perception is that our, our biggest competition is the status quo or the seller just deciding not to do anything because they're really getting our offer.

And not a whole [00:29:00] lot else because firms, obviously if banks are lending it all into the segment they're lending with much requiring much larger like copayments with them. And then also they're putting a lot of covenants around, around the debt and it's more expensive. And so that combination of three things has kind of slowed down the marketplace a little bit.

So the businesses that we're seeing Over the past six months, call it are more businesses that really need to do something. You know, somebody had a health scare or somebody really needs liquidity. Those types of situations. So, you know, we're, we're still seeing opportunities. We're under L. O. I.

With the business right now that we're really excited about. But it has, the pace has slowed down sort of over the past call it, I guess how long ventures rates went up, like nine to 12 months. 

Jason Hall: So combination of maybe just to summarize that a little bit, so maybe less, less engagement in terms of like the number of potential opportunities, but probably more qualified conversations.

Tim Hanson: Yeah, well, I would say there, there are more quick yeses, but also [00:30:00] more quick no's because a lot of times when somebody has to do something, something has gone wrong and, and we're not probably a great fit for that. You know, one thing that will be interesting here is all the debt that people took out in 2021 and 2022, you know, Arguably that stuff probably had three to five year terms on it, which means there are a whole bunch of people who are going to need to try to have an exit here over the next 12, 24 months into a slow marketplace which could have a very interesting follow through impact on returns for private equity firms returns for private equity writ large.

And then also sort of the opportunity environment, the deal making environment here going forward. So, you know, we try to just always be ready for whatever the world's going to throw at us. That's one of the reasons we don't use that. You know, we're able to, you know, our other ethos around the office is that we want to do what makes sense a hundred percent of the time and what doesn't make sense zero percent of the time.

We don't always get that right, but that's try to, that is kind of how we prepare for things. 

Jason Hall: Well, funny. Sometimes we think we, we think we always know [00:31:00] the answer to that, but we always find out the true answer to that after the fact, right? 

Tim Hanson: So yeah, sometimes feedback loops are pretty slow. 

Jason Hall: Yeah. No, that's true.

That's true. And it's interesting seeing exactly what you're talking about play out in the. Public equities market as well. Obviously you look at real estate. So many REITs are still well down particularly in certain sectors because that public REIT market adjusts really quickly to the realities of, of debt.

And it's been slower to play out in the public, public equities, equities market. So, it's interesting to hear the observations of the, kind of the private side of the business where things are. Being affected to let's let's go ahead and make that shift over and talk a little bit about Tim Hanson, the individual investor.

And as a starting point, we kind of hinted at it before making that transition from working more in the public equities world, working for a company with a 401k where you can buy individual stocks or invest in ETFs and funds and that sort of thing. And now working in [00:32:00] private equity, having access to participate financially in private equity, but also still thinking about liquidity and, you know, money you're going to need to spend in the next 27 years.

I'm curious to kind of hear how you've evolved over the past five years or so, and how private equity has informed how you think about investing as an individual investor. 

Tim Hanson: You know, it's funny, I, I, I don't really draw a line between, I think of risk reward as just like an ongoing battle between like good and evil.

Or, you know, so, so what have you, like risk is on one shoulder and reward is on the other. You know, I think my biggest my, my biggest learning probably over my investing career is that, you know, There is no such thing as safe risk, or there is no medium risk, like you're either taking risk or you're not.

And if you're taking medium risk, you're deceiving yourself about kind of the circumstances that you put yourself into. So, you know, you know, 2008, nine. [00:33:00] Banking stocks typically were considered very, very safe, right? They made up a huge part of the S& P 500. They were considered blue chips. They paid dividends, all these sorts of things.

And lurking beneath them was all this toxic stuff that nobody knew what they were doing. And so even the 

Jason Hall: executives running those 

Tim Hanson: companies, exactly right. And, you know, and they thought that by You know, tranching those loan books into different segments that you could have a risky sleeve and a less risky sleeve, you know, and that's all, it's all BS, like it's either risk or it's not.

And so, you know, that's been one learning of mine. So in terms of investing, like I invest in stuff that I think can earn very high return, like personally speaking, I invest in stuff that I think can earn very high returns. Or I have cash, that's it. And you know, and if it's, I don't, you know, like a dangerous game for me would be like, ah, I've got too much cash.

So why don't I stick it in a utility stock? Or why don't I stick it in, you know, these medium term treasuries, you know, right before interest rates skyrocket and the treasury market gets cut. You know, by 25 percent like the [00:34:00] length of time it takes to make up for a 25 percent loss on a treasury is enormous.

You can't, you can't do it. You can't do it. You got to hold it to maturity at that point. And that's, 

Jason Hall: that's, I'm glad you mentioned that because the reality is that 95 percent of, of retail investors, they don't own bonds. Right. Right. The ones that own bonds, they own ETFs, right? So, so talking about completely erasing their ability because those bond managers have been, they're flipping those bonds already and your loss is booked.

It's absolutely booked. If you don't own the bond and you can't hold it to maturity and you invested in a bond fund, you're, you're hosed. 

Tim Hanson: I mean, that was ultimately what, you know, the story behind what took down Silicon Valley bank, right? Which was like, they invested in all this medium, low risk stuff on their balance sheet.

Then it gets nuked because interest rates go up. Unexpectedly, and now because of the way they're regulated, you know, they can't hold it to maturity and their capital ratios have gotten destroyed. And all of a sudden they're bankrupt on paper. You know, that I think is, is, is, you know, you're either, you know, like I said, no medium risk.

You're either safe or you're not. And you can even argue that cash [00:35:00] isn't, isn't safe, but you know, you got to go somewhere, but it's predictable. It's true. You know how it will behave. You know, and I'm not, I'm not trying to come off as a prepper or anything like that. Like I take plenty of risk in other areas of the portfolio, but like I said, you know, either you're going for returns or you're not and, and don't have assets.

Jeff Santoro: Do you have an example in mind, Tim, of like maybe earlier investor you that did fool yourself into thinking you were invested in something that had medium risk? 

Tim Hanson: Oh, oh, you know, I've been very candid about this. You know, when we were starting at the Fool, you know, I got very fortunate to travel to a lot of emerging markets.

And, you know, emerging markets are considered a pretty risky place, right? But You know, you, in terms of business quality and people, and I mean, in China, for example, you know, I was naive at the beginning part of my career about just the amount of deception taking place at even very well established companies with regards to accounting and so on and so forth.

You know, I was naive about, The amount that currency can, can turn against you if you're investing dollars in a, you know, if you've got dollars and you buy shares of a [00:36:00] great Indian company and their company performs great, but the rupee devalues by 30 percent against the dollar, well, You have no return.

You've probably lost quite a bit of money for taking a risk. You didn't not only did you, I mean, the most dangerous risks are the risks you take without assessing the risk of them, or you inadvertently take the risk and didn't think about it. So, you know, there's that hedging stuff. You know, there's a lot of stuff.

I mean, the best way to learn is to lose very small amounts of money as a young person. And I did that for, for certain. So, you know, I'll, you know, if you, if you talk to people around the office, you know, I, I don't know that they would describe me as cynical or paranoid, but when we see numbers, you know, take them with a grain of salt, especially in the private space, you know, I, I said beer money earlier.

I mean, that, that's literally what we started calling what we underwrite our investments to, which is, Hey, we're We don't, it's not worth anything unless we can literally take it and go buy beer with it. You can also call it distributable free cashflow. You know, but you know, you know, we were laughing today.

I don't know that there was a story [00:37:00] about the accounting at Starlink, the Tesla Elon Musk, you know, satellite company and how he had called it in the zone of profitable. And then they had somebody say, Oh yeah, they've got numbers that they sell, send to their investors and they add back and we see ad backs all the time in the materials we get from businesses where they're adding back costs.

Of launching the satellites because those are all one time events. I mean, you can't make this stuff up. It's wild. And so you got to scrutinize all that stuff and, you know, you know, not to date myself, but you know, if you go back, there was Groupon with like community adjust or no, we work at community adjusted EBITDA Groupon had ACS.

So our consolidated ACS. So I were, despite being a marketing business, they added back their marketing expenses as one you know, people are You know, numbers can be, what's the saying 

Jason Hall: about, about, about statistics, right? It's just number numbers. You torture them the right way. They're going to say exactly what you want them to say.

Tim Hanson: That's right. That's right. And so, you know, you got to double check everything. You know, the nice thing about, you know, [00:38:00] when we do diligence here, in some ways we're taking more risk in a variety of ways than you would investing in a large public company, you know, but we ask and we receive all the bank statements.

For any business that we want to invest in, you know, good luck asking Google to, or Amazon to give you their bank statements. I mean, it'll, it'll, it'll never happen. And maybe you trust that the auditor is doing the work to verify all that stuff. But, you know, I think there's been a lot of evidence over the last.

Number of years that, you know, even white glove audit firms are not fully doing their jobs or, you know, are not truly independent. And so, you know, we, we make the joke that a lot of the financial industry is sort of, just held together by like Excel and bubblegum. And at least we're in a segment of the market that's willing to admit that.

You know, but Jamie Dimon never would admit probably how many things that JP Morgan are being held on very manually, you Updated spreadsheets. 

Jason Hall: Yeah. No, it's, it's true. I, it, it reminds me a little of something I saw on social media that I think was just hilarious. And I think it reminds me a little bit of what probably happens with some of [00:39:00] the, some of the auditing firms and some of the things with businesses.

It was a, it was a retired major league baseball umpire who was talking about bad day games. Bad days at work, typically following good nights out where he would actually trust certain catchers. And he would tell him, he's like, it was a bad day as a, you know, it's just going to be a bad day. So if it's a strike, I want you to hold it a little longer.

If it's a ball. Throw it back quick. And so then he's calling it based on what the catcher is doing. I had no 

Tim Hanson: story. That's funny. 

Jason Hall: Yeah. So that is just except just imagining that, that, you know, some, even if it's small versions of that happening in the real world, they do. So it is interesting, like with private equity, anytime you're buying a private business where you're the onus of due diligence and trusting the information is more on you than anything else.

But once you become. A large stakeholder, especially for, for for Permanent Equity, like I said, where you're buying controlling [00:40:00] stake, you actually have the ability to really directly influence the business, right? Because you can tell them what to do when it comes down to it. And unless your name is Carl, I can Carl icon.

You can't, you can't do that in private markets. So I'm curious thinking about again, the individual investor where we truly, once we buy. And of course, hope is a terrible thesis, but we do kind of buy and hope right at the end of the day. We have to, you know, we're hoping that everything we have, we can trust and that sort of thing.

What, what are some things that you think most individual investors maybe should focus on that they actually can control as an investor? 

Tim Hanson: I mean, you're, you're, you're right. Your temperament, you know, that's the number. I mean, I, you know, I think it's old soft at this point. I don't think it was when I started investing, you know, I think it was, you know, behavioral economics and those things were just sort of going into the mainstream.

Obviously, like Danny Kahneman, who recently passed away and Amos Tversky started doing that stuff. You know, 50 years ago, but I don't think bless his heart. More people [00:41:00] like Morgan weren't doing it. Weren't writing bestselling global books about it until, you know, probably five, five to five to 10 years ago.

But that stuff is just so important because, you know, bad decisions, you know, bad decisions are what, are what kill you, like if you make a mediocre decision, but you hang in there long enough, you're probably going to be okay. It's when you make like a rash, bad decision, you know, something drops 30%, you sell it and lock in that loss.

Like that takes a lot to recover from. And so just, you know, being patient, not panicking, you know, COVID when COVID happened, like I opened up my Ameritrade account and saw how much money I'd lost and I was like, well. It'll be back eventually. And I think, you know, from what I've been reading, you know, the academic literature before everybody got their stimulus checks and started, you know, gambling on mean stocks, a lot of people sold in those that week after that drop and locked in a lot of losses, which is, which is sad and unfortunate.

So, you know, I think no matter what you're investing in. Whether, you know, asset classes or asset classes, and there are a million of them, and I'm not here to say that our little slice of private [00:42:00] equity is the best, or Joe's venture capital, or, you know, all the guys on real estate, Twitter, who are building incredible apartment buildings around the world, you know, all those things are different strategies, but the thing that underpins them all is like, it's like successful investors are very Have very common traits with regards to their ability to tolerate loss, their ability to be patient, you know, their ability to not do anything.

Like if there's nothing to be done, you don't need to do anything. Like the bias to action is just a killer. You know, we didn't do a single deal in 2020. Because you know, the numbers in the operating results were really distorted. People had high expectations. There was a lot of uncertainty and we, you know, we're obviously don't get paid to do nothing.

But. We have time to do nothing. And so we didn't do anything and it was great. And obviously that was a year that if you're comparing us to like a public benchmark, you know, we got hammered, you know, because zero is a lot less than, you know, plus 20 or whatever it ended up being. But we were fine with that.

We're happy looking stupid. You know, we don't really, you know, we're not irreverent. We care, [00:43:00] but you know, we're trying to just thoughtfully play the long game. 

Jeff Santoro: It, it, every time I think about. How the information age has sort of taken away a lot of the advantages that maybe investors had 30, 40 years ago.

It does make me think that. The only advantage we actually do have now is temperament. If you're your ability to, to not do something rash versus someone else's a decision to do something rash is probably the biggest edge we all can have as individual investors. A lot easier to do than say for most people, but I feel like that's the only place we really have an edge.

Tim Hanson: I mean, I, in, in the public markets, I agree with you a hundred percent. I mean, and to go back to my earlier point, that was one of the reasons why I moved from public to private because You know, and the public, you really, you really 

Jason Hall: are paranoid, Tim. 

Tim Hanson: Oh yeah. I'm paranoid and cynical. Okay. Well, you know, because everybody can see the same stocks, everybody's, you know, I'm with AI and stuff like screening tools, for example, have just gotten.

Incredibly powerful. Like anybody, like what, you know, any dude in a, you know, in, in their [00:44:00] boxer shorts can basically do now what Jim Simon started at Renaissance technologies, you know, 40 years ago. And they have more computing power than he had access to. And, you know, yeah, a hundred percent. And so, you know, like I said, you know, you know, in our line of work.

We think we can have some advantages with regards to how we operate the businesses and then also how we cultivate kind of proprietary deal flow and see things that other people aren't seeing. But that's, you know, that's really hard too. But you know, temperament and mindset that is a lot of what it comes down to.

Jeff Santoro: So. I'm sure you follow the financial news like the rest of us, Tim. So like the big news story in markets for the past year or so has been AI. It seems to be in every single earnings call, whether or not, whether the company has an actual tie to AI or not. So I'm curious if you have any sort of hot takes on it.

Even Warren Buffett managed to, 

Jason Hall: Managed to get a mention of artificial intelligence. Yeah, this 

Jeff Santoro: is all totally for SEO for us, by the way. All good. He was doing. 

Jason Hall: He was doing, he was being tongue in cheek, but yeah, we're doing it for SEO. 

Jeff Santoro: I am curious if you have any hot takes on AI writ large, but also [00:45:00] I'm curious if, if the proliferation of AI over the past year and, and, you know, generative AI and all that stuff has had any impact on the way you guys do your business.

Tim Hanson: So, a couple, yeah. So we are watching with open eyes about all the developments in the space because we're of two minds on the one hand. You know, small businesses are always starved for resources. And so to the extent that artificial intelligence can become a resource that can automate a whole bunch of tasks for small businesses, that is potentially a huge win.

You know, and I can tell you, you know, one of our guys in, in our building who helps do projects with special projects with their businesses, you know, one of our businesses is a call it 70 year old manufacturer of amusement park rides, and they've got thousands of user manuals. For each one of these rides and when someone who owns a carousel that was built in 1974 calls up and needs a replacement part, you know, the, the parts team has to go or had to physically go pull the paper manual from the library [00:46:00] page through it in order to find what they were looking for and then give the advice about how to fix it and they digitized all that stuff and then I, and I think used one of the AI programs, I'm not sure which one to basically create a chat bot that can answer 95 percent of the questions that are coming in about these 50 year old amusement park rides that may need service or may need a replacement part.

And they're already estimating that they've saved that, that team, like a month of time over the course of a year, which is, which is incredible. So we're looking for opportunities like that all the time on the flip side, something that's, you know, the danger side of it we see for small businesses is that most of these AI technologies are very expensive.

To develop, and they seem like they're being deployed by larger technology businesses that historically have had a strong bias towards consolidation. And so, you know, Amazon just likes to gobble up more and more and more pie for itself and vertically integrate and so on and so forth. And, you know, we've seen some of our small businesses that used to, you know, [00:47:00] sell via Amazon.

Amazon is now direct gone direct to China. They figured it all out. And they're using technology to basically circumvent you know, suppliers in, in, in many ways. And so to the extent AI ends up being a tool developed by big business for big business, you know, we see that as a, as a risk factor. So I think there's both opportunity and danger but obviously very fast moving and very interesting.

Jason Hall: Yeah, our we had Simon Erickson on a few weeks ago. One of the things he talked about is, you know, the AI bubble versus inflection point. And I think that's a really key way to think about it for me. And I'm interested to see how, as it plays out, as we do see more consolidation in these big businesses, these enterprises acquire more, but also spend AI access to it for small and medium sized businesses, to be able to leverage it in the ways you're talking about.

Okay. In ways that are affordable, right? That's going to be, 

Tim Hanson: well, yeah, cause you also need the, you know, I can tell you, none of our businesses have a software programmer on staff other than our ad tech business in Minnesota. You know, it's not something they'd ever think about. Hiring for, and you know, and is somebody who can do programming going to go [00:48:00] work for a pool builder in Arizona?

Like probably not. So you got to find some way to not just access this technology, but also find someone who's fluent in it. 

Jason Hall: Well, it's going to be fun to follow. That's that's for sure. Tim, Tim, this has been a lot of fun. Thanks for giving us a peek, a peek into, into your world. 

Tim Hanson: Yeah, it's my pleasure. No, I enjoyed talking with you guys that, that that flew by for me.

So appreciate y'all. 

Jason Hall: They do. We're a lot of fun. A lot of fun. One last question for you. 

Tim Hanson: Yes, sir. 

Jason Hall: Where can the people find you? 

Tim Hanson: In terms of? Well, here in Columbia, Missouri is where we call home. And we're always happy to host people at Permanent Equity. People have interest. We have a lot of visitors. We actually host two events every year here, one called capital camp in May and then another, which is, you know, exciting.

Maybe applicable to folks in your audience called Main Street Summit, which will be in October. Thank you, sir. We had a thousand people here last year just talking about small business, operating them, running them, investing in them, being a service provider to them. So, you know, those both have, have websites and we'd love to people come visit, you know, our [00:49:00] website is PermanentEquity.com. You can sign up for Unqualified Opinions there, which is our daily newsletter, and then get all of our other stuff. You know, on Twitter, I'm on, I'm https://twitter.com/timhanso. I tweet a lot about well, I, sometimes about investing, but a lot about mushrooms and stuff I see in the woods, cause when we moved to Missouri, we decided if we were going to leave DC, we'd go real rural.

So we live about 12 miles outside of town here on some land in the woods, which is a lot of fun. Yeah, so I'm around. 

Jason Hall: Awesome. All right, people, I'm going to make it easy for you. Just go to InvestingUnscripted.com and sign up for the newsletter. It's going to be in the transcript. We'll have all the links there.

Jeff will work with our producers and make sure everything is in the The description too, in your podcast app. So yeah, make it easy for people to find him. I 

Jeff Santoro: just have to decide like which producer to bring it to, but yeah, we'll, we'll figure that out.

Jason Hall: Right, right. That's, that's true. Jeff is, Jeff is our producer, people.

Tim Hanson: Man of many hats and a very good friend, right? Exactly. 

Jason Hall: All right, Tim, once again, thank you so much for coming on. Really appreciate it. 

Tim Hanson: Thank you guys. Appreciate you. Be [00:50:00] well.

Jason Hall: Okay, everybody hang out for just a couple more minutes because Jeff and I are going to give our thoughts on our conversation with Tim. Plus we want to share our thoughts on our hundredth episode, our official hundredth episode.

That's coming up after a quick break.

Jeff Santoro:  Earlier in the show, you heard us talk about investing platform Public.com. That's where you can trade options with no commissions or per contract fees, and you get a rebate of up to 18 cents per contract traded. NerdWallet recently gave public five out of five stars for options trading.

If you want to see why, go to Public.com and start getting a rebate of up to 18 cents per contract traded. Paid for by Public Investing, options not suitable for all investors and carry significant risk. Full disclosures and podcast description, US members only. 

Jason Hall: Hey Jeff, you ready to uh, you ready to make the jump into private equity? 

Jeff Santoro: I, every time we have a guest on who does something different, I am, I'm always thinking to myself, like, this would be a fun job to have. I had the same thought when we had Joe on to talk about venture capital.

So yes, I'm ready. I'll send my resume to Tim. I'll move to Missouri and jump into [00:51:00] private equity. The, if he was the most unqualified CFO ever I would be the most unqualified private equity employee ever. 

Jason Hall: You can break that, you can break that record, right? 

Jeff Santoro: Yeah, I, I thought that was really interesting. I, when he was talking about what they offer for, or what they offer to a company with whom they partner up, it reminded me of, this is going to be a little bit of a weird tangent, but the company Digital Ocean, because they do infrastructure, cloud infrastructure like, like AWS or Google Cloud or.- 

Jason Hall: They target small to medium sized businesses, right? 

Jeff Santoro: And the whole their whole pitch is basically when you're a small business, you don't have the time, the headcount or the expertise to manage your cloud stuff. So let us do it. Right? That's the one sentence. Kind of quick pitch for them, and it reminds me a lot of what.

Permanent Equity does for the, the, the companies that they take a stake in, which is basically, you know, he used the pool company as the example. You're a great, you're great at building pools and you, you [00:52:00] may even be good at marketing or advertising, but you just don't have the time for that. We'd rather you take the time to build pools.

So we'll do that for you. Like, I thought that was an interesting way to, you know, an interesting flavor of private equity, as he put it, that I had not ever thought of. I always, it was always the barbarians at the gates kind of thing in my head. . 

Jason Hall: Yeah, no, it's one of my favorite things when we have these when we have guests on like, like that is learning something that, that I didn't know, right. That's just completely unrelated to kind of the things that we focus on.

And Jeff, that's hard for me because I know so many things. Yeah, I'm humble too. I'm most humble. I know more about being humble than than anybody. But no, seriously, but you're right. It's getting the opportunity to kind of scratch, scratch that kind of intellectual curiosity itch and the. So, I've, you know, I've followed Tim pretty closely for just about, I don't think, probably two weeks into him writing Unqualified Opinions, I started I subscribed to it.

So, I've, I've read most of them and it's been really [00:53:00] interesting. So I knew Permanent Equity, like they had a long, long investment period that you commit to, that you commit your capital to. I didn't realize it was 27 years though.

Yeah. Yeah. That was, that was surprising. I did the math and I'll be in my seventies. Right. If I committed capital to, to one of their to one of their deals. And that's remarkable. And it reminds me of the interview we did with Brian withers. This is going back a ways. One of our early interviews where one of the things Brian talked about and Brian is semi retired, he, for those that don't follow Brian or didn't hear the interview.

And link's going to be in the, in the transcript in his early fifties, he walked away from a corporate job and kind of semi retired. He reached that level of financial independence, but one of the things that he talked about is that making that transition, like learning what long term really means.

And it's not three to five years, right? Until you're measuring in decades, you're really not truly thinking long term. 

Jeff Santoro: No, for sure. Yeah. Yeah. Yeah. I thought that was interesting too. When he, when he said 27 years, my, I was like, wow, [00:54:00] that's, that is a long time. That is serious commitment to locking up your capital.

I think the, the last thing that I I'll say that kind of jumped out at me, Tim didn't say this directly, but I got the vibe that one of the things that he's really Come to realize slash appreciate about the work he does now is having so much. I don't want to say control, but having so much inside knowledge where there is no, there is, he really can't get BS by the company because he can see everything, right?

He mentioned being able to have bank statements and all that kind of stuff. And, and, and, and how much, when you're a public equities investor, like we are, You are just putting your faith in basically the sec and the auditing company for the company that you're investing in that everything's on the up and up.

And then you have to have enough knowledge to see through adjusted numbers. And when management wants to spend something to, to make it look like it's not as bad as it is or better than it is you know, I, I would imagine if he were to move back into something with public equities, that would [00:55:00] be. A hard thing to transition back into having less knowledge, having less security in, in the information or less confidence in the information that you're getting to make a decision.

Jason Hall: Well, it's the difference between being an investor and being an owner, right? And you know, we, we try to, we try, we talk about it here as kind of in the toolbox is like having more of that owner mentality. Remembering that you don't own a business, right? It's just not lines on a screen, the theoretical values, you know, you own a business and it's generating.

Cash flows and it's doing things and making products and services. And remembering that, but I mean, it, it is more than just a field theoretical thought process with with what they do. They own the businesses, right? They, they see, they see the actual bank statements. They have meetings with the owners that report to them, right?

It's a very different. I think that's interesting. Jeff, is there, is there a question that we didn't ask Tim that we wish we had have asked? 

Jeff Santoro: I mean, I, I [00:56:00] had a lot of my own, like, because I'm just, it's just all still new ish to me questions that I would want to ask if we could go back, but it would have been just for me and probably not as interesting for everyone else.

Like, I'm big on examples. So like, I would have loved to know, tell me the entire story of one company, like what, how the deal came to be, what you did for them, how it's turned out. Like, I have a lot of, you know, minutia kind of details, so I can kind of wrap my head around what private equity in the way that they do it really is.

So that would kind of be the only thing I would ask. I'm actually curious if anyone is listening to this and has their own questions about private equity. Send them to us. We could actually follow up with Tim if we don't know the answers ourselves and maybe hit them on the next mailbag But I would be interested to know the listeners thought especially if if the topic of private equity was newish to them as well 

Jason Hall: Yeah, if you're reading the transcript you can comment on there You can put your questions there too if that's the easiest way to get to them.

I get them to us So yeah, I like that. I like that idea I can't really think of anything that, that I didn't [00:57:00] ask. It was just a good conversation all around. Geoff, I want to do one more thing before we go though. A hundred, a hundred episodes. I want, I want to share some thoughts. Go ahead. That's a lot of episodes.

Jeff Santoro: I'm exhausted. 

Jason Hall: Me 

Jeff Santoro: too. I mean. Well, it, it, it is, and I think it is a landmark worth spending 30 seconds on. I, I knew, I knew we hit 100 total episodes a couple weeks ago because I, there's a count so much. thing on the Spotify page that we upload to so if you count the first Fridays and the Rough Cuts, we, we were actually hit 100 total episodes a little while ago, but yeah, we're like, we're like 115 total at this point, but having 100, like, well, like I said, like the planned out weekly on purpose ones Is a nice little milestone.

I remember when we started, Brian Withers, who you just mentioned, said to us, he gave us some statistic, like, 80 percent of podcasts don't make it past 5 or 10 episodes, or something like that, or 20, whatever the number was.

And I can totally understand how that happens. [00:58:00] You do a handful, you lose the fun, and you stop, but it's just as fun for me now as it was in episode one, so. Yeah, I think in some ways 

Jason Hall: I might be enjoying it more, to be honest with you. Are you just trying to 

Jeff Santoro: one up me, because I said I'm having as much fun?

Jason Hall: No, I am one upping you, I'm not trying. There's no try. There's only do or do not. So, no, I.- 

Jeff Santoro: Why, why would you say that you're having more fun now? 

Jason Hall: Well, I think we're better at it. Number one we've been doing this long enough that we've refined it and we've kind of figured out what works for us and we've got the cadence and the time that we do different things not to bore people with kind of the making of the sausage, but We the other part of it too is the people that are listening.

We have a lot of engagement on social media That's really useful great questions A few of you you have questions and ideas that you send to us sometimes that turn into shows And that's really helpful And really really useful so. 

Jeff Santoro: And we have the occasional Listener who trolls us in a very good hearted way, and I'm always appreciative of [00:59:00] that 

Jason Hall: That might be the best part.

That really might be the best part. Jeff, here's to, here's to the next hundred episodes. 

Jeff Santoro: Yes, man. I'm looking, looking forward to it. Let's, let's stop and reflect one more time when we get to 200. Sounds, sounds like a good idea to me. 

Jason Hall: Okay. As always, we love to give our answers, observations, thoughts, and have great people like Tim Hanson come on to do the same thing.

But the answers that we give are our answers. It is up to you. Dear listener to answer your own questions about these hard investing topics. You can do it after a hundred times telling you, you can do it. I still believe in you. All right, Jeff, we'll see you next time. 

Jeff Santoro: See you next time.