Expert: Joe Wright – Three ways to invest in resources | Airlie Funds Management

Bryce: [00:00:31] Welcome back to Equity Mates Investing, a podcast where we explore what's possible in the world of investing. If you've just joined us for the first time, a huge welcome. My name is Bryce, and today we're doing a deep dive on the resources sector and looking at a stock that might surprise you to chat it through. As always, I'm joined by my equity buddy, Ren. How are you going?

Alec: [00:00:49] I'm very good, Bryce. Very excited for this interview. We're about to speak to Joe Wright, who's a senior equities analyst at Airlie Funds Management. Airlie has an ASX listed fund. The early Australian shares fund. The ASX ticker is AASF. 

Bryce: [00:01:06] Performs well I know that. 

Alec: [00:01:08] There you go. So we should congratulate Joe on that. But as you said, we are doing all things resources and materials here. But the stock that we're talking about isn't a minor. All right. I guess picks and shovels play into the mining industry. So, an interesting one. 

Bryce: [00:01:26] Yeah. Can't wait. In today's episode, we're going to speak through the investing process that Joe goes through Airlie . And then, as Ren said, a bit of a deep dive on a stock that is a part of the fund at the moment. So we look really looking forward to this one. We should say a big thank you to Airlie for sponsoring this episode and supporting equity mates, allowing us to continue to provide free content for the equity mates community. But with that said,lLet's crack in. Joe, welcome to equity mates. 

Joe: [00:01:55] No dramas. Thanks for having me. 

Bryce: [00:01:57] So Joe we're going to, spend a bit of time unpacking your journey in finance and, and what you're doing it early and then turn to discussion around the resources sector. Now we want to kick off with a bit of a fun fact. We learn about you. In fact, you and I have a bit of, shared common background here before. I'm not involved in the finance industry, so to speak. But we both started in the arts. So you started, doing a history major and then, a masters of art curation at Unsworth. I started a bachelor of, music in performance. Classical percussion. Yeah. And here we both find ourselves. So what happened? 

Joe: [00:02:43] No, it's a good question. Yeah. I did a Bachelor of Commerce, Liberal studies. It's a good, good degree, because you got to do an arts major or arts with science. I'm not good at science. I did arts, and I loved art history. I loved art in general. And that was my favourite part of that degree. And then I went travelling and I was like, what am I going to do next? What? Yeah. What? How am I going to find my way? And I found this Masters of curation, at Kofa, which is now UNSW's art and design. And I enrolled in it, and I dropped out after three months, because I didn't really like it. I mean, I ended up, you know, putting it on and getting into finance, which is a bit of a twist. But, you know, I love maths, and I thought it was just a great way to sort of apply that, that part of my brain.

Alec: [00:03:32] Yeah. It's a big step from art curation to funds management. How did you find I guess why funds management? 

Joe: [00:03:41] I had people in my life who exposed me to that industry. So I always knew it was a pathway where some people come up through university and maybe naturally fall towards these large accounting firms or consultancy firms. I always knew funds management was out there. And a super interesting job. You know, I think taking a step back, you know, I always found the democracy of the stock market very interesting. Anyone can start an account, anyone can, you know, put $1,000 into some of the world's great companies. And then the idea on top of that that other people were better than others, other people have an edge, and other people could do better work and prove themselves, you know, through their returns that they were superior, I think always interested me. You know, I'm competitive and, you know, it's an industry where you get to follow your nose and do deep dive research, but also the easy competitive industry where, you know, people get proven to be good or bad. And I think that's something really exciting in that.

Alec: [00:04:39] Now, of all the sectors you could specialise in, you know, there's, there's a lot of, sexy ones out there. You've, you've got something that I guess Australians find sexy, which is resources. Why resources? 

Joe: [00:04:53] Well, it's a funny one. I mean, you know, you can probably tell from looking at me. I've never been to mine. I've actually never been to Western Australia, to be honest. And I'm sure a lot of people I did that history course, would probably, you know, look down on me for being so actively involved in resources now. But personally, you know, it was you know, I joined early. That was a sector where an analyst had just left, you know, Matt and Emma asked me if I would like to take it over. And I sort of jumped at the opportunity because, you know, it is a really important sector in Australia. It's a big sector. Lots of interesting companies. And, you know, and frankly, it's, it's very necessary sector. It's political. It's got a lot of characters in it. It's, you know, hugely, hugely profitable at points in this cycle. And there's some really good investments as a result. So yeah, now I've been to heaps of mines all the time and it's great.

Bryce: [00:05:46] Favourite mine. 

Joe: [00:05:47] Favourite mine, I tell you. I went down Cadia which was Newcrest and now Newmont's Gold mine. And man, we drove like 30 minutes before we got to the underground control room and, I was so claustrophobic, but it was pretty amazing. Yeah, it's chugging the waters the whole time. 

Bryce: [00:06:08] Joe, how would you define your investing philosophy?

Joe: [00:06:12] I'd like to sit here and say I, like, grew up, you know, smashing the Warren Buffett odds and all of those sorts of things. But the fact is, you know, I've only read a handful of these investing books and a few of them, the ones that really resonated with me were guys like Howard Marx. And, you know, I even got my hands on a PDF of Seth Clemens, you know, book. And the thing that resonated to me about those guys is it's like about buying a dollar for $0.50, you know, it's about having a really big margin of safety and your investments such that, you know, if the downside case eventuates, you don't lose much money, and you're always pretty attractively positioned in any business. And I say that is inherently my philosophy. You know, ideally, we have a pretty strict investment process. It starts with a balance sheet and it goes business quality, management quality. And finally valuation and valuation of course, it is lost because it's a relative metric versus, you know, balance sheet business quality and management quality. And I think through that lens, you know, my philosophy still can come through as an analyst. I think on top of that, you know, resources, there are so many unknowns. You know, commodity cycles are really difficult to predict. Assets can not perform the way you expect them to. You know, they're inherently unmoving faces. As you get deeper into a mine and you, you unlock new things or discover new things about an asset. And so having that lens of, you know, an appropriate margin of safety, I'd say, really rings true in the sector for me.

Alec: [00:07:46] Yeah. It's a, it's a funny one when you think about like trying to apply that, buying a dollar for $0.50 and having an appropriate margin of safety to an industry that is so I guess tied to commodity cycles and so many things like outside of the control of the, the company and the management team. 

Joe: [00:08:05] That's right. 

Alec: [00:08:05] You know what lithium had an incredible bull run and then it's down 90%. Yeah yeah yeah yeah. Trying to forecast that in your DCF and then try to buy $1.50. It's difficult. 

Joe: [00:08:15] It's so difficult. 

Alec: [00:08:16] Yeah. So how are you? How do you do that day to day. 

Joe: [00:08:18] An interesting segway to maybe how I think about it is just so before at Airlie I was at a place called Schroders and I did four years there and they gave me the gold sector, and the gold sector is this sector no one wants to cover. Yeah. It's like in Australia basically because it's so difficult to take if you are on the price and people don't even pretend to take a view on the price because it's not like oh, what's the cost curve, what's the supply demand. It is always US inflation going, where's U.S. interest rates? Where's U.S. dollars? All these, you know, are other factors that influence the price. But I think the flip side of that is you're forced to really understand the quality of an asset. You know, its companies are just being like, oh, lithium goes up, I'm going to buy all these lithium stocks like you really need in gold to understand the quality of an asset, especially when you have such a loose view of price direction. And so, you know, funnily enough, covering that sector probably gave me a lot of foundation to then look at the resources sector more broadly and have that asset quality focus. Because you're right, like there are so many known unknowns. And I think, you know, in the context of my investment philosophy, you know, when you're doing a DCA for trying to understand future cash flows of, or of an asset, you just have to apply conservative assumptions, whether that's cost or whether that's commodity price. You know, when something stacks up under those conservative assumptions, you can feel like you are buying something maybe for $0.50 on the dollar. I think that's how I approach the sector. 

Bryce: [00:09:48] So you mentioned the investment approach that you take at Airlie, which is balance sheet quality, business quality management and valuation. A lot of those areas, there's probably things that we as retail investors can think about in our own approach to investing as well. So starting with a balance sheet, like what are some of the key things that you're trying to tick off when it is part of that process?

Joe: [00:10:09] It's about where you think the balance sheet is relative to a level of mid-cycle earnings. So, you know, a lot of companies may get flak for oh look, the leverage looks high at this point in time, but perhaps the project fully isn't ramped up. Or perhaps, you know, commodity prices are very low. And that's why your expectation is mid-cycle. And so maybe the balance sheet. It isn't a stretch. Does its people think you know, on the flip side, you know, a company might have a lot of debt. But commodity prices are at an all time high and earnings are perhaps above mid-cycle. And so you think, oh, this thing looks fine. You know, when the tide goes out, you find out that they're perhaps too leveraged. And then, of course, you sort of want to understand the nature of the debt itself, if they have any, you know, what are the what's the rate they're paying. What are the covenants? You know, how does this potentially result in a situation where they need to raise capital to pay off the debt holders? 

Bryce: [00:11:01] And so then you talk about the quality of the company. So how does that differ from looking at the financials of it? 

Joe: [00:11:07] Yeah. Quality of of any resources company I think just comes back to the asset itself. And the asset you know is the resource. It's the grade. It's the life of mine. It's the cost per ton of production. You know all these things are stuff you can understand with enough research, stuff you can compare to other assets really easily. That's the great thing about the resources sectors. There's lots of mines in any given commodity and there's great transparency around cost. Because ultimately what you're trying to find, I think for a great long term resource holding is companies where, the cost of production will hold them, will allow them to earn an attractive return on capital through the cycle. And that's a function of generally where the asset sits on the cost curve as well as, you know, the supply demand outlook. 

Bryce: [00:11:57] So balance sheet quality of company. The third approach is quality of management. So what are you looking for?

Joe: [00:12:06] Management quality in resources I think is like the secret sauce. There's a reason there's all these names in the sector that attract investors who, you know, will follow them into any asset because of their track record. Ideally, you know, where we have large shareholders in mineral resources. Again, there's a big management quality element there. We think Chris Ellison knows how to spend capital better than anyone else. We think he, you know, takes risk, the kind of risk we want him to take at points in the cycle. And he's a great project execution guy, he's delivered, you know, many projects on budget, within the time frames. He said he's going to. And so, yeah, I think that's management quality for resources. It's about auditing the track record of, you know, whoever's running the business because it just tells you a lot about this style. It tells you a lot about how risk averse or unversed they are. 

Alec: [00:12:59] It's such a subjective metric quality of management. And one way to kind of make it more objective is to look at someone's track record, because that's objective and provable. But so many mining projects are Airlie. And they're people that don't perhaps have enough of a track records. So are they, Do you just say if they don't have a track record, we're not investing or do you have other, I guess, tools too, I mean. 

Joe: [00:13:25] The really obvious tool, which, you know, is not something you want to necessarily rely on, but I think is super helpful is how much did this company own themselves? Yeah. I mean, you know, if they're, if they're, mining executives out there with large amounts of their own personal wealth in the company, you naturally have pretty good alignment. I think Chris Ellison owns 12% of Mineral Resources, for example. I mean, that's that is just an objective metric for alignment that I think is, is is really helpful that I yeah, that argument of, you know, is this person the right person to build, take this resource from a few drill holes in the ground to, you know, a fully functioning project is really difficult, and it is probably the reason ideally concentrated portfolio quality names we see clear a lot of that sort of pre-production part of the market because again, like, it's really difficult to know all of the unknowns and then price it, price the company accordingly. 

Bryce: [00:14:24] And then the final part of the approach is valuation, which you did touch on, but maybe just elaborate on what that actually means to you early. Like, is it the date value that you're looking for or where do you sort of fall on the spectrum?

Joe: [00:14:36] I've always found the most comfort in using a DCF to value mining companies because they're not perpetuity. A lot of them, you know, a lot of companies might have a ten year life. Maybe there's, you know, optionality in the resource to extend that life, but these aren't ongoing businesses into perpetuity. And so just putting a multiple on any year of earnings sort of feels lazy, especially when you know, the companies, most companies in resources, frankly, give you heaps of disclosure around, you know, cost metrics, production metrics, future growth, things like that. Like I said before, you know, when you can build a DCF and layer in some conservative assumptions around the mine itself as well as, you know, the commodity price outlook and feel comfortable that, you know, with those assumptions in place, you're still getting a discount. You are still able to buy the company at a discounted valuation. You know, that's probably how we approach the sector. 

Alec: [00:15:25] Yeah I think if you want to learn the art and the skill evaluation. There's a DCF in particular. There's no better industry to start with than the mining industry. 

Joe: [00:15:34] Yeah, I think that's right. 

Alec: [00:15:35] So speaking of learning, I guess, you know, people listening to this would probably say a lot of similarities, to your life. You know, you didn't study, well, you just studied art and art curation at uni. 

Joe: [00:15:48] Only for three months. 

Alec: [00:15:51] Went to a sector where you didn't have any specialised knowledge or experience, hadn't even been to a mine before, but hadn't even been to Western Australia when you picked up this sector. So you were really coming in pretty cold. For people who are in a similar situation but want to get better and learn more. What were some of the most valuable resources you found to upskill quickly?

Joe: [00:16:13] Like, I think some people, you know, think of the mining sector as like this other way of investing or this other type of investment, like, these are just businesses that produce cash flows and your value based on the future cash flow generation. And that's how people should think about them like any other business. You know what I mean? You should just look at them like revenue costs, cash flow. The only nuance being that the sort of element is perhaps not perpetuity. Again, like when I was at Schroders, I was very fortunate enough to sit next to the head of research there, who was also the resources analyst, you know, so I was able to soak up a lot of information that way. And I know, you know, that's not particularly helpful for.But that was my journey. Yeah. I'd say for people, you know, retail investors, I think it's really simple stuff that goes a long way, like rating an annual report from front to back. You're going through the quarterlies and listening to the calls. You know, the companies give a lot of great information on calls and you get to hear the sell side. And he had them thinking about things. And, you know, while the sell side is a tool I use as well. The great thing about the mining sell side is actually a lot of them are examining guys. They guys have covered this sector for a long time, and so hearing their questions gives good insight into, you know, the issues that they think are the most important issues that any investor should be looking at. Beyond that, I can't sort of be any clearer how fortunate I am to be able to go and meet with management and see these mines. You know, I probably underestimated how much of a visual learner I was. And, you know, a lot of people say, oh, you know, what are you gonna learn on site visit? Like, frankly, seeing these things in person and how they all fit together was, like, unbelievably helpful and still is. And again, like, not super helpful for. That's all I got.

Bryce: [00:18:02] Now, Joe said you covered the gold sector. And that's an asset class where we as retail investors are faced with a choice between buying the actual commodity. Or buying the producers of the commodity. So how do you think through that decision? And I guess help us think through that. 

Joe: [00:18:18] Firstly that decision is made for us in that we can only buy companies. We can't buy the commodity purely. But, you know, for retail investors, what I would say is buying any resources commodity. It is this amazing way, I think, to get exposure to big global structural trends. Like if you are bullish, you know, the penetration of electric vehicles, buying lithium as a commodity is a great way to get exposure that way, because you're not faced with valuation risk on a company, you're not faced with asset risk. You know, faced with management risk, you are not faced with trying to pick the right electric vehicle company, for example, you get to buy a commodity that you know has very broad based consumption, you know, outlook for that sector. You know, in the same way, buying iron ore is about the rise of the Chinese middle class and economic growth in places like China and India. Same with thermal and metallurgical coal, buying copper. Maybe you are bullish on the electrification of the grid that needs to occur. You know, I think if you don't want to or can't get your head around the risks associated with buying an actual producer of the commodity, you're buying, the commodity isn't exposure. It is a really great way to get aligned to those sorts of trends. You know, something like a good example is like Pilbara minerals, right? You know, we run this company through our process all the time because it stacks up really well. It has an amazing balance sheet, you know, $2 billion of net cash. They got a great asset. Good part of the cost curve. Long live you know able to expand I think got a great management team who are really conservative. Do exactly what they're going to say. Don't swing the bat around too much. Real operational guys. but the valuation is tough. You know, we look at the valuation and can't quite get there on our lithium price assumptions. And so, you know, to buy that company with a constructive view on lithium is to take on that valuation risk, which is something we're not always comfortable doing. If a bullish lithium if you are bullish lithium and you're a retail investor and you two maybe have that sense, the valuation is pretty punchy. You can buy the commodity. And get exposure.

Alec: [00:20:20] So that's really the first decision for a lot of investors. Have you as you mentioned, enough of you early because you're not buying the commodity directly but for everyday investors Or commodity producers. Then I guess the second question and where we want to drill in is what are the hallmarks of a good company, a good investment in, in this sector? 

Joe: [00:20:39] The hallmarks of a good company. You know, the things we talked about in our process, good management team, a great long life asset, you know, in the right part of the cost curve. Attractive valuation with a strong balance sheet. You know that those four things make for a good company a good investment. You know it's slightly different in that you're trying to identify where those attributes are perhaps mispriced. That's how I'd think about it. You know with regards to asset quality. Again I can't labour this enough. It's about where your asset is on the cost curve that enables it to earn a return on capital through the cycle that you think is attractive. There are people who will buy super high cost assets in any commodity, with the view that if the price rebounds significantly, there's a lot of leverage there. I totally get that. You know, that's sort of not my wheelhouse. To be honest, because I don't think you, maybe you're probably getting compensated for the downside risk that the business needs to raise capital, things like that. Also, one other thing I think is worth touching on is you can get exposure to resources. Yeah, through the commodity itself or through mining companies. You know, another great way to get exposure to resources sectors are the service providers of the resources industry. You know, there are companies we look at a lot know companies that maybe provide the production inputs like explosives. Companies that provide the labour companies that provide the equipment. You know, these these businesses can be on always, in fact, a lot, but can be more production linked than price linked. Which means that you should have probably a more stable entity, you know, than a mining company that's subject to the whims of the commodity price. You know, if all you do is sell explosives to an iron ore business like BHP, you're probably not at the whims of the commodity price, because at the end of the day, that BHP Ion Ore business is profitable, you know, in much lower iron ore prices. They're still going to keep producing. They need to produce a certain amount of times every year. You know, you're actually a pretty stable business if you're able to sell them that product over and over again. so that's another way we think about resources. 

Bryce: [00:22:45] So Joe let's turn to some companies that you're either invested in or excited about. We love going and understanding what opportunities are out there. So thinking about those hallmarks of a good investment, give us a company. We'll start with what it does. And then we'll go from there. 

Joe: [00:23:03] Yeah. I know I'm going to, you know, like, oh, I've been listening to the podcast hoping this resource guy fires off some, some, some speculative mining company no one's ever heard of that we can pile into. Unfortunately, don't have that. I have, Seven Groups, so Seven Groups, a core holding in our fund. It has been for a while. It still is, because we think it still looks attractive. But the reason we're attracted that business, acknowledging that it's a conglomerate of many businesses, is for a business called WesTrac. WesTrac is the exclusive supplier of caterpillar gear to, mining companies in New South Wales. If you are a mining company, either of those states and you want to buy a new piece of caterpillar gear, you have to buy it through WesTrac. You know, it's truly a privileged asset in that sense. Caterpillar runs that model as a dealership model. They're the OEM. They basically give dealers around the world the exclusive right to certain territories, and it's up to that dealer to build a profitable business, you know, selling that gear to the prospective customers. And, you know, where else would you want to sell this gear? Then in WA, you have some of the most profitable mining companies globally with attractive regulatory environment. So, you know, for that reason, it's a great business. And I think the reason, you know, everybody knows that it's not like that's a secret. I think that the nuance with WesTrac has been that it used to look quite like quite a cyclical business because, you know, selling new gear to mining companies is inherently linked to the CapEx cycle of a mining company, which is also linked to the price cycle. Well, WesTrac been able to actually switch the mix of revenue away from the sales of new gear towards their parts and maintenance. Now, parts and maintenance is much less linked to, the CapEx cycle of a mining company is far more linked to the regular production that needs to be maintained for a business, you know, and subsequently the wear and tear on a piece of gear through the year and the age of the fleet. You know, I've struggled over the last decade to see the age of its mining fleet get older, which means more maintenance. And as a result, over the last decade, WesTrac now is far more a production linked business because it relies, because its revenue mix is far more based on parts maintenance, and labour around that. And as a result, you know, we think it's a much more stable business than perhaps the market does. We think there's a lot of growth there. As companies like BHP and Rio extend the life of their mining fleet, you know, for another ten years, arguably ahead of the need to maybe switch into electric, battery powered vehicles. And so we think there's just a long runway for growth. You know, I love this stock. And so I can talk about it all day because there are other parts to the thesis around borrowing, around cuts. 

Alec: [00:25:51] I was going to ask that because, you know, with these conglomerates, you might have like a gem of an asset that you love, but you can't just buy that asset. You got to buy the whole thing. And Seven Groups, for people unfamiliar, Kerry Stokes is the vehicle that's now his son's vehicle as well. It owns Boral, Beach energy, Coates. So I guess give us the give us the full view of what that is. 

Joe: [00:26:14] That's a good idea. Maybe it's best if I just put it through the Airlie process to show. Sort of. Yeah. This is how it stacks up. So start with balance sheet there on two times leverage, which we think is perfectly acceptable for a business of this quality. In terms of business quality. So the business is most of the valuation comes from three businesses. That's WesTrac. You know, that business does a 30% return on capital. As I was just saying, it's much more stable than it has been, in history. It's a growing, incredibly high quality business. We have Coates. Coates is an equipment hire business. You know, again, these businesses are generally thought of as super high quality. But Coates has delivered, you know, a 15% return on capital in the last few years. They manage to sort of drive margins higher and higher through utilisation, through improving the network through just sort of really simple operational improvements, well executed. And then you have Boral. So again, Boral Australia's largest, you know, concrete and cement manufacturer. This is a business that is in the midst of a turnaround at the hands of Vic Bansal, who's, you know, an executive we think really highly of from an operational perspective, and a business that, frankly, with its market position, should earn a much higher return on capital than it has done in the past decade. And so, you know, we look at those three businesses and we think, you know, these are great assets. They should earn a return on capital higher than that of the average ASX industrial business. And yet Seven Groups trades on a multiple equal to that of the ASX industrials business. For context, that's around 19 times the average ASX industrial business does a 12% return on capital. You know, you've got three businesses within Seven Groups that all do higher than that. Well in the case of Boral it should do and will do higher than that. And yet we can pay the same multiple as the market. You know, you overlay the management quality factor. You know, I think the Stokes family over the last five years, Ryan Stokes in particular, have proven themselves as capital allocators. You know, he was able to basically buy Boral without putting a takeover premium in place on market, you know, a really attractive valuation and generating a lot of, you know, value as a result. They manage WesTrac and Coates really sensibly. Those businesses just keep going from strength to strength. And then, you know, I think finally the earnings of Seven Groups as a conglomerate have probably or will double basically over the last five years from say maybe FY 19 to FY 24. The corporate overhead at Seven Groups is $30 million. You know, five years ago it was $25 million. Like, this isn't News Corp with a $200 million overhead. You Know that that doesn't make sense to anyone. And there's all these governance issues around it. And for context, we own News Corp for different reasons. But, you know, I think there's a lot to be said about how these guys run their business. You go to the Seven Groups offices, you know, they're not in the Paris end of the Sydney CBD. They're on Liverpool Street. It's, you know, like half of a serviced office. There's maybe, like under ten people who actually work in the Seven Groups overhead. You know, they're very astute operators as well as capital allocators. And, you know, frankly, they're not taking the piece, which is just something, you know, as an investor, you really, really want to say. And then, of course, you know, they own 60% of the Business. They're incredibly aligned with any minority shareholder. And again, we still think the valuation relative to the quality of the businesses within the conglomerate is super attractive. 

Bryce: [00:29:47] Including the media business? 

Joe: [00:29:48] Well, the good thing about the media business is it's 1% of the valuation. 

Alec: [00:29:53] Okay. 

Joe: [00:29:54] Yeah, that's obviously been struggling. But I like what I will say it's not like because it's 1% of valuation Ryan gives it no focus. Yeah. You know he'll speak to it in depth. He's trying to turn it around, which is impressive. You know, it's not just this non-core Oh, don't worry about it, you know?

Bryce: [00:30:13] Nice. 

Alec: [00:30:13] Yeah, I love that. That's a fascinating look at a company that I'm sure a lot of people have probably heard about. Everyone heard about it with the Boral takeover. Yeah, that. I'm sure a lot of people haven't considered it. I think. 

Joe: [00:30:25] Investment. The only other thing I would say on Seven Groups is luck. You know, now that you have this great track record of capital allocation, given the balance sheet is not particularly levied. You sort of back them to go again.

Alec: [00:30:37] I was going to ask that. Yeah. We always like to finish long term. What does this company look like in ten years if they execute successfully? 

Joe: [00:30:43] And I think the good thing is, you know, ultimately that nothing is sacred in Seven Groups. You know, if they can see an opportunity to create value by selling a business, they will. And then on the flip side, they have the the leverage to go again. They have the balance sheet position to go again. And you back them to do it sensibly with the, you know, with the shareholders front of mind, and create value. And that's, that's been the experience for us as shareholders. And there's no reason that we don't think that will continue. 

Bryce: [00:31:13] Watch this space. 

Alec: [00:31:13] Yeah. You always love the succession of like, father to son is always like a risk point where it's like, does the son want to go out there and do a big godfather deal to prove himself? But it feels like this Boral deal was that for Ryan? 

Joe: [00:31:27] Yeah, that's a good point. I mean, he did. Yeah. You're right, he did. You know, they took over. They took back 50% of coats from private equity. You know, years before that they obviously bought the beach stake. You know, both of those have proven to be pretty good investments. Boral, it was a big go. They took leverage above where most people would be comfortable. I'd say they took it about three times. And they paid it back quicker than anybody thought they ever could. And the earnings of Boral have probably exceeded many people's expectations. So it's hard not to say that Ryan has improved himself. Yeah. 

Alec: [00:31:58] Yeah. Well it's a fascinating company. Definitely one that we'll keep watching. 

Joe: [00:32:02] Yeah, yeah, yeah. I'll come back next time with speculative money. 

Bryce: [00:32:08] We're looking forward to that, Joe. But thank you so much. That does bring us to the end of our chat today. Great. Learning about your journey in finance. And, you know, how are you thinking about applying the Airlie approach to other resources sector? So thank you so much, been an absolute pleasure. 

Joe: [00:32:22] Thanks very much for having me.