Why AMP packed in stock picking. The alarming under-performance of Aussie banks. Can Trump halt the march of emerging markets?

This week James Kirby and I discuss why large cap fund managers are struggling:
  • The origin story of James and Alan!
  • Australia’s banks are the second worst performing in the world this year, very concerning given their importance for the ASX
  • AMP goes passive
  • Can Trump sap the momentum of emerging markets?
  • There’s no evidence that Chinese investors have cooled on Australian property
  • It’s not a time to invest in REITs
  • How to protect yourself as a peer-to-peer lender
  • Career advice for commerce students!

Hello, I’m Alan Kohler, Publisher of The Constant Investor.

And I’m James Kirby, Wealth Editor of The Australian.

And this is The Money Café.

The Money Café.

Well, James you’ve been running a story about banks.  Now, the banks regard themselves as the best in the world but apparently they’re not.

No, they’re not, not at all, Alan.  Especially if you’re an investor.  I was going to mention something before we start today just to kick things off.  On the weekend I’m going to do a piece with The Weekend Australian on Saturday and it’s about how I arrived in Australia 30 years ago, almost exactly 30 years ago this week, 1987…

I remember it well, James.

About 10 days before the biggest one-day stock market crash in history, 23 point-something percent in a day.  But, what I wanted to mention to our listeners was that I came to Australia exactly 30 years ago because I got a job.  I got a job with an ad in the newspaper, The Guardian Newspaper in London, in what would have been, I suppose May-June 1987 and I was a young 24-year-old.  The guy who gave me the job when I arrived, the Editor who I met, was you.

Exactly.

How is that?  Three decades ago.

I’d been Editor of The Financial Review for, at that point, a couple of years.

Right.

And I was having trouble finding journalists.  I had to hire journalists for…

Yeah, that’s right.

I mean it’s rather different to know where we’re all getting rid of journalists but I was trying to find journalists…

Yeah I know, a golden era.

And couldn’t find any in Australia so I put an ad in The Guardian.

You did, and wasn’t I happy to see it.  Because I was just saying to myself at the time I’d like to go to Australia.

There you go, and you turned up.  I think, I recall that it wasn’t quite as fabulous as you might have expected to begin with because you were a bit on your own, I think.

I was on my own, that’s right.

And I’m not sure we looked after you perhaps as well as we might have.

I have no complaints, Alan, I have no complaints even now looking back perhaps with even more rose-tinted glasses than I had at the time.  It all worked out very well.

You’re writing that for this Weekend’s Australian?

I am, yes indeed.

Well then I should probably tell my side of the story.

No, I don’t intend to actually – this is an exclusive piece of information for our podcast listeners, that I tell this particular aspect of it all.  But in terms of what we have been doing through the week on the paper one of the things I certainly was looking at mid-week was about our banks.  Now, all the tension on the banks at the moment, of course, is their appearance in parliamentary inquiry.  This is the latest one, the Coleman inquiry.  But of course, the bank CEOs are now artists at how to front a parliamentary inquiry, they have them smiling, they have all their charm turned on and they know exactly how to deal with the questions that they’re being thrown about interest only loans and everything else.  But, meanwhile, while all the attention is on sort of bank behaviour the banks as stocks have been sinking and sinking.  30% of the entire market capitalisation, even now in their shrunken state, goes to the big four banks.  They are the second worst performing banks in the world this year because all the banks are going great this year.

Particularly in Europe.

Yeah, European banks are up 30%.  Global banks are up 14%.  Our banks are down 3% this year so far.  The only banks that are doing worse are the Japanese banks, down 5%.  It’s just worth observing that because of course…

James, do you think that means that they’re cheap, has that crossed your radar would you say?  Because yes, they’ve come down but at what point are they a buy?

Well, I’ll tell you this much; there’s very few buy notes out there just now.  In fact, the only change in raisings I saw in this month was one of the brokers downgrading Westpac back down to neutral.  So very few people are saying they’re a buy just yet because there’s so much bad news around.  The whole swing towards growth away from income isn’t helping them.

It’s interesting.  We had Bank of Queensland kick off the bank reporting season this morning.

They did, and they did something – a special dividend or something.

I haven’t even seen it but they’ve had solid results I think.  I think the expectation is that all the banks will be pretty solid, that they’ll meet expectations.  Maybe if that’s the case maybe the bank share prices will have a bit of a tick up next week.

There’s a certain point at which you have to say.  These banks who are in this beautiful legislated oligopoly, unique in the world, of course the money will start flowing back sooner or later into those stocks.  The big one is Commbank, of course.  When they get a new Chief that’s going to be very interesting.  One of the things looking at financial services it’s time already, Alan, for us to have our Mega Trend of the week.  Of course, our Mega Trend of the week is sponsored by BT Financial Group, which is the sponsor of our podcast every week.  The Mega Trend this week has to be, Alan, AMP giving up on stock picking or at least swinging very much towards passive investing.  This story, I might add, was an exclusive by David Rogers, our markets reporter in The Australian, earlier this week.  But why don’t you give us your steer on what you think is going on there?  What does it all mean that AMP is moving to passive, why is that big news?

Well, because AMP has been one of the historic, if not one of the original, stock picking funds in Australia and have long been one of the most powerful investors in the country because they’re active investors.  But what’s occurred in recent times is that it’s become clearer and clearer that it’s almost impossible for funds like that, big funds like AMP, to beat the index.

Because they are the index, is that it?

Well, because the larger you are the more closely you have to match the index because you have to go for big companies that have liquidity.  You can’t really make much of a difference to your portfolio or put much your portfolio into small caps because they’re too small.  That means if you’re buying big companies – and they’re all roughly buying it in proportion to the index weightings, so they go underweight and overweight and so on but then they subtract their fees.  It’s almost impossible for them to make a decent fee.  I mean AMP’s fees have traditionally been – I don’t know what they are now but they’ve traditionally been around the 2% mark, crikey.  You sort of subtract that from the market performance and you’re really starting with arm tied behind your back.  I think that studies have shown that 80% of funds, fund managers, fail to beat the index, 80%.  And the 20% that does beat the index is not the same every year.

I was going to say, they don’t do it twice in a row.

No.  But the point to note is that that really only applies to large cap investors.  Small cap investors do beat the index because the only way to invest in small caps really is to be active.  You can’t…

Yeah, you can’t…

Well you can, you can invest in the small cap index however…

There’s very divergent performance.

Sure, and so small cap investing is about being active.  Large cap investing is increasingly about being passive.

So, the head of AMP, he came out and he said so we’re going to be benchmark unaware from now on.  Why don’t we try and explain to people what they mean by that, when they say benchmark unaware.  As I understand it means not that they’re unaware because of course they know what it is but their game is not to match or beat an index anymore.  Their game is to give some sort of absolute number.  Is that it, some sort of…

Well that’s what benchmark unaware means.  I didn’t see that he’d said that because if they’re going passive they’re entirely benchmark aware if they’re passive.  It’s all about the benchmark which is the index.  I’m not sure what that means.  benchmark unaware normally means that they’re active investors and they’re just investing in companies and not worrying about the benchmarks.  But the story that David has been writing about AMP is that they’re basically going passive which I think is a big interest and it’s a big move.

Well, why would you be convinced by them when you know the ETFs are out there already, the legions of ETFs from Vanguard and State Street and everybody else?

I think in one way it’s probably a cost cutting measure, they’re just getting rid of their expensive – all these active fund managers, they’re expensive.  They drive German cars.

I know, and some analysts have been let go actually.  Their Head of Fundamental Equities has been let go.

Yeah, they’re getting rid of the analysts.  They’re going to have to trade down to Japanese cars, it’s going to be hard.

Well, I wonder can a leopard change its spots.  Isn’t that really what we’re asking here?

Possibly Korean cars.

Possibly cars from emerging markets, which allows me to segue beautifully into an item on the agenda today which is the rise – you might not say the rise of emerging markets but the return of emerging markets into focus for us.  Shemara, the head of Macquarie Asset Management and the number two in Macquarie Bank – the only higher salary, as I understand, is Nicholas Moore.  She is on $17 million a year, this woman and such an impressive character.  She doesn’t speak in public so often.  She came out this week and she’s in Japan speaking to an international audience and she is saying that investors in this region are in the box seat and that there’s very little growth offered in the market, that rates were going to stay low for a while yet but that emerging markets had this great potential.  It’s interesting because of course it’s the emerging market ETFs that have probably been – them and the US tech ETFs would have been the best performing in the last few weeks.

I actually think the best performing market this year so far, is Japan.

That’s right.

Obviously, which is not emerging, it’s entirely emerged.

No.  We often talk about emerging markets either ex-Japan, sometimes they take it out sometimes they leave it in.

Yeah.  The other thing about emerging markets – and I actually think that that’s probably right, particularly India which is an extremely interesting market in general as to the others but the trouble with emerging markets is they’ve always had plenty of potential.  I mean every year you turn around and everyone is saying it’s all about emerging markets and then 1998…

Well, not every year because they were told when Trump came in that America would become isolationist and that would really hit them but it hasn’t.

That’s true.

It hasn’t hit them at all.

Well, that’s because Trump hasn’t done anything.

Yeah, that might be why.

He hasn’t really managed to achieve anything.

He hasn’t, no, but he may still pull American capital back to America, if he got his tax cuts in.

That’s right and if he does that would be sucked out of the emerging markets.

The emerging markets, that’s where it comes out of, yeah.

And that would possibly cause a bit of a currency crisis in those countries.  But I think we’re a long way from that happening to be honest.  Speaking of emerging markets Chinese people, you’re saying, are still in the property market.  Now, somebody has been writing a story about that, is that right?

Yeah, they have.  It’s interesting, because of course a number of commentators were saying a few months ago the Chinese have cooled in the Australian stock market, the Chinese don’t matter so much anymore in the Australian stock market.  There was a sense that maybe the capital curbs that they’re putting on the Chinese were really making a difference because they’re certainly making a difference to the casinos.  Crown has been in trouble basically since they did put on these capital curbs.  It was logical enough to assume that they might sooner or later…

That might apply to the casino known as the Australian property market.

Yeah, exactly.  Hasan Tevfik, who’s a pretty good operator with quite an imaginative approach to research…

At Credit Suisse.

At Credit Suisse.  He does reports that no one else seems to do.  He did one on self-managed super there a while ago which was really outstanding.  He did one on the Australian property market and he says that there is no evidence whatsoever that the Chinese are buying less in the local markets.

Buying less?

Yeah.

That they’ve gone.

No evidence that they’re gone, no evidence even that the capital controls of China is curbing the enthusiasm of Chinese for our markets, particularly in Sydney and Melbourne.  So that’s an interesting one, isn’t it, because you’re looking at these different forces that are pulling the residential housing market up and down, what may push it up and what may push it down.  Shane Oliver did a pretty good report yesterday, he’s very good at just picking a subject and just saying here’s the economic situation.  He did one on the housing market.  His whole call is it may come down 5% or more in the major cities, least of all Melbourne, most of all Sydney, but that the basic conditions are not there for a slump in house prices.

I saw that report and it was quite interesting because he showed a long term graph of the Australian median property price versus the trend.  So he had a straight line trend from the time and he showed the wiggly line of the actual prices.  The conclusion from that graph, which he sort of endorsed in a sense, was that the current property price overall in Australia is 27% above the trend.  So, 27% above the trend and there have been times in the past where it’s gone below the trend.

What about when it went above the trend, has it been higher than 27% above the trend?

It has but not that often, and 27% is up there in terms of its in excess to the trend.  I looked at that graph and thought you could actually picture from just looking at the graph, you could picture a 35% to 40% decline in property prices.

And the deviation wouldn’t be crazy off the trend.

Not entirely.  But it is also true that in the past when interest rates have risen, gone up and the booms have ended, the prices have come down between 5% and 10%.  That’s Shane’s main point, is that the corrections in property in Australia in the past have always been around about the 10% mark.

Which is soft.  It’s soft compared to the US a few years ago or Europe a few years ago.

And it’s clear that Sydney prices are already starting to fall.  But I guess it gets back to Hasan Tevfik’s work, and that is that if the Chinese did desert the market then you might see a bit of a bigger fall because that would really dry up the demand.

It would, but I suppose the point for most of us is they’re not. 

Well, thank goodness for that.

Thank goodness for that.  How about this week’s – can you bring us up to date on this week’s ‘Tony Abbott and the energy policy show’ episode and what has he been saying and doing?

Well the week started with Josh Frydenberg’s speech at the Financial Review’s energy summit in which he basically flagged that they’re not going to adopt the clean energy target because renewables are cheaper than coal and gas now, not existing coal and gas but new coal and gas.  So new solar and wind are cheaper, or produce cheaper energy, than new gas and coal.  His point was well we don’t need a clean energy target.  It’s interesting, it wasn’t too long ago where they were saying that the problem with renewables and the clean energy target is that they raise the price of electricity and now we’re able to get rid of the CET because they’re cheaper.  Anyway, putting that point aside…

Hard to follow, really, yes.

Putting that to one side that’s how the thing began.  The business world is coming out and saying wait a minute, come on, we need to have some sort of mechanism so  we know what we’re doing.  Then, Tony Abbott got up in London and made this amazing speech in which he has basically completely outed himself as a full denier of climate change and said it’s all rubbish.

I don’t know if he really, it’s a question of completely outing himself…

And said that actually a bit of warming is fine and it’s good for us because more people die from cold snaps.  I think he has kind of ruled himself out of the debate in a way.

He seems to leave some of his more outlandish stuff for when he goes to London, he’s done this before hasn’t he?  There was that one about…

I think a lot of Australians do that, don’t they?

Yeah, because they feel that no one is listening when they’re outside of the country, that’s not unusual.

Especially in London.  I remember the adventures of Barry McKenzie, yes.

Right, yes.

Perhaps Tony Abbott can be seen in the context of Barry McKenzie.

He is seen in that context at the very least by many people and worse.  Why don’t we do some questions, because we have quite a few questions.

Well we’d better got onto them.

We’ll do them alternately, I’ll do the first one from Derek and you can do the next.  I’ll ask you this one.  Derek writes; I’m enjoying the podcast.  I have a question about REITs.  What’s the outlook for them?  What’s the outlook for REITs, Alan?  That’s what we used to call property trusts.

He’s also asking about peer to peer lending, which I know more about than REITs to be honest.  REITs are real estate investment trusts.  They invest in commercial real estate.  Their prices tend to have a lot to do with interest rates.  Obviously to some extent what’s happening to commercial property rents is an influence.

Yes, they’re landlords…

Commercial property rents, that is offices and shops in particular, their rents don’t tend to change too much so that the revenues are generally stable.  Their prices tend to fluctuate according to interest rates and so when interest rates are falling, as they have done in recent years, then real estate investment trust prices go up.

They’ve been having a great roll, haven’t they, they’ve been in a roll for five or six years.  He’s asking about the outlook.

In principle the outlook would suggest that if we’re in an interest rate rising period, which we probably are – it may be a slow period of rising interest rates, then there’ll be downward pressure on REIT share prices as a result of interest rates rising.  So obviously they’re all different and you’ve got to look at what their gearing is and what they actually own.  But in general this might not be a time to own REITs.  Peer to peer lenders…

What was the question about?  I’m interested, he says are they worth the risks.

So, with lending when you invest in a bank you’re investing in a lender and your margin of safety is from the capital that they’ve got which is generally roughly 10% of their loan book.  You’ve got a buffer there, an equity buffer that you’re relying on to absorb bad loans.  The thing about these peer to peer lenders, including RateSetter, is that they don’t really have that capital.  They have no capital.  Some of them have…

Don’t they match you against a borrower?

Yeah, so you invest or lend directly to a borrower.

Yeah.  I think we’ve both had a look at this, haven’t we?  I think you went further than I did.  I really looked quite seriously at them, spent a whole weekend looking at them and I thought it was too much trouble.  There was so much that could go wrong, not so much the basic structure but the timing.  For instance, if you’re matched with an individual borrower it’s all about whether that borrower wants to actually take the loan, they might only take half at the time, it was all terribly complex.  At first glance at least I thought it was not worth the effort, what did you think as an investor?

Well, you certainly wouldn’t want to put all your eggs in that basket of peer to peer lenders, or especially in one of them.

That’s an important point because that’s what your offered, isn’t it, when you go into those sites.

Well you’re offered and you have to take diversity, you’ve got to invest in lots of different – so if you had, for example, $100,000 or even $10,000 say, to lend to investors you would definitely put $1,000 into 10 loans.

But that’d be a hell of a lot of work, wouldn’t it, a lot of paperwork?

Yes, you do have to do the work.  It’s easier to put $10,000 into CBA or ANZ, that’s for sure.

That’s the point I was making, yeah.

But you’re getting a better return.  With some of these things you’re getting 14% to 15%.

At an absolute optimum case you are, when it all works out perfectly well.

Well you’re getting that interest rate, the question is whether the borrower is going to go bust.

Yeah, that’s right.  You’re taking on risks.  I don’t worry so much about that part of it because the system seems to be quite good.  What I found frustrating was its amazing complexity, and if you wanted to diversify you’d almost want to make your job part-time.

Really the thing is that we haven’t had a recession in Australia for 25 years and none of these things have been actually tested by a recession.

Haven’t been severely tested, yes.

So that’s when the crunch comes.  Anyway, Philip says…

Now, we have three more questions.  What’s Philip’s question?

I like your podcast, Money Café.  Many thanks, Philip.  As an investor in superannuation using comparison tools like Chant West I noticed that they compare performance after fees and taxes.  Industry funds perform better under this measure, in particular Australian Super.  Why should I care what the fees are, shouldn’t I just care about performance after fees and taxes?

Yes, that’s a good question, Philip.

James, this is up your alley.

It is indeed.  You should always care about the fees mind you, Philip.  You should certainly be aware of them.  Obviously if the performance is superb you can allow some latitude on fees.  Last week, Alan, I mentioned that controversial report from Stockspot.  Chris Bryicki’s Stockspot Group.  It was the third or fourth year they had done this report and they had come out and said that actually on their numbers, and I use that term advisedly – on their numbers, which was basically a relatively simple average comparison, the final outcome for investors was not much different between industry funds and retail funds.

10 basis points, you said.

10 basis points.  This was three years in a row, this is for the last three years.

My inbox has been filled up with people abusing you.

So has mine.  Mine has been filled up with people abusing me directly.

I’m saying it wasn’t me.

And I’ve been saying hey listen, I’m just reporting a report, number one.  Number two; I have gone back to the report author, Chris Brycki, who is a good operator and has a good track record in the market and he is in his world.  He stands by the report and he stands by his figures.  However, I would say on close inspection he did not do the figures in the way that APRA does them, for instance.  Importantly he did not include – with the retail funds they invariably have platform fees and they often still have commissions and trading commissions.  They were not included in his figures.  That meant the gap between the industry and the retail was not what we usually see.

You’ve got to include them.

Well, there you are.  You could talk all day about this because each side will tell you forever that there’s variables that they must include but I am happy to say that that’s what he says, he stands by the report, it is different to APRA and that’s why it’s different.  I think you’ll find industry funds will be tested by these new disclosure rules when they come in this year and how they present their fees.

Philip, the bottom line is you should just care about performance after fees and taxes, that is the main thing.

Absolutely, that’s what matters.

It’s not to say that fees and taxes are not irrelevant but the thing that matters to you is what do you get after fees and taxes, that’s the thing.

Yes.  Okay, Jack, a question from Jack.  I just started listening to your podcast and I like them.  I’m a commerce student at Monash University and I have a couple of questions, two questions.  Number one; are there specific areas of commerce you have a high regard for majoring in?  I’m very coy…

Are you asking me?  I don’t want to answer this, I’ve got no idea.

Jack, do the one you’re best at and the one you love and not one you’re going to get a good job in.

Of the things that he listed; accounting, finance, marketing, economics and data analytics, I would say data analytics is the thing for the future.

Yes.

Economics – look, they’re all okay.  Pick one that you like, Jack.  The most important thing, Jack, is to study something you enjoy because you’re going to be always better at something you like.

And you’re going to be doing it a long time.

You are.

30 years maybe.  Okay, his second question was as a young investor – he’s only 19 – he says are there investment areas I should look into?  Given my investment horizon my current investments have been Vanguard indexed Australian shares.  Well, there you are, I see a very practical young man getting into an indexed fund as his entre, if you like, to the local market.  Interested to hear your opinion about buying indexed Australian shares at present.  That’s a good question, you know, because though we’re enthusiastic about indexed funds and ETFs, I am anyway.

I’m not.

Well, hang on.

I’m against them.

You shouldn’t be against them.  It depends on where you’re talking.  For instance, emerging markets, small cap American companies, areas that you cannot get in easily or diversify in easily, as an alternative to many managed funds I think they’re better.  In terms of buying the Australian index the problem is the Australian index is going nowhere for years and years, a decade now.

That’s what I’m saying.  I’m in favour of specific ETFs, as you point out, like a Nasdaq ETF or emerging market ETF, a European market ETF, fine.  I mean where you’re actually deciding on a thing, making a decision.  But if you just buy the Australian share index ETF what you’re doing is buying 30% banks, BHP, Rio Tinto, Woolworths, Wesfarmers…

That’s right, they’ve got 10 companies that totally dominate.

Telstra – and all of those stocks, all of the top 10 which are about half the index, are – well, how can I put it.  I was going to say ‘no good’ but…

Underachievers, regular underachievers.

Particularly for the future, and you wouldn’t buy them really, you wouldn’t.  Jack, stay clear of them.

Stay clear of Australian large cap, ASX 200 based ETFs I think might be a conclusion there.  Last question is from Jeremy.  He does talk about the clean energy target which we have dealt with, let’s see what the other part of his question is.  Do you think prices will be cheaper without a clean energy target and do you agree that the transition to renewables would occur without subsidies?

Due to technological advances the answer is yes.  We are clearly in a transition from fossil fuels to renewables, solar and wind, because solar and wind are now cheaper to build than new gas-fired and new coal-fired power stations.  But the problem is the timing because if there’s no government intervention in the market, either through a clean energy target or an emissions trading scheme or an emissions intensity scheme or all these various schemes, if they don’t do those things there will still be a transition to renewables but it’ll take longer.  The trouble is we’ve committed to a certain timeframe under the Paris Agreement to achieve emissions reduction by 2030, I think.  I’m just trying to remember now.  Anyway, the clock is ticking on our commitments.  In order to achieve the commitments, we have to actually intervene to force the pace.

Yes, right, okay.

Which is what the CET is about.

Yes, although it may not be abandoned for largely political purposes we have to conclude really.  Do you think that’s true?

What?

The abandoning of the clean energy target, or at least the logic that was put forward by Josh on Monday morning.

The political logic is they want to be different from the Labor Party and then they want to be able to accuse the Labor Party of causing your electricity price to go up which will have absolutely nothing to do with the truth.

No, but, hey, you know, it’s politics. 

It’s politics.

Okay, thank you, Jeremy, and thank you everybody for your questions.  Before we go, Alan, I’ve got to talk about one story that we just noticed this afternoon, a wonderful story.  It’s about a man called Didi Taihuttu, but he is Danish and you might be fooled by the name there.  He is 39 and he hasn’t been reading your stories about Bitcoin because he has just – and he hasn’t been listening to Jamie Dimon either, saying that Bitcoin is a – what did he say, a fraud?  Because he has…

I called it a scam.

A scam.  He sold his house and he sold all his family goods, electric, motorbike.  He lives in the town of Venlo in the Netherlands, and he has put it all on Bitcoin.  While he is waiting for Bitcoin to pay off he is living in a campsite.

Well, there you go.  See I reckon his wife really won the lottery when she married him.  Fair dinkum.

Listen, before we start making assumptions so far in his life he seems to have been perfectly sensible.  He was a computer programmer and he had a computer training company.  Wait until you hear this; then he went on a trip around – he sold the company, went on a trip around the world and one of the things that got him going on Bitcoin was, and I’m reading directly from a story here on an iPhone, was that on the beach near Noosa in Queensland he spoke to someone from Dubai who was trading in Bitcoin.  He got terribly excited, kept contact with them on Skype and is now a true believer.  But, before we go.  Yes, Jamie Dimon of [Citibank] has said it’s a fraud.  But Lloyd Blankfein, his opposite number across the street in Wall Street, head of Goldman Sachs, came out during the week and said he would be very slow to write off Bitcoin and he’s just saying he’s not in or he’s not out, but he hasn’t made his mind up yet. 

Your man in the Netherlands has made up his mind.

It’s a story that captures the imagination.

The key to trading Bitcoin, it seems to me, is knowing when to sell because there will be a time to sell.  Because people have already made billions.

I know, extremely lucky people who moved at the right time.  But our friend in the campsite – well he is waiting for the day.  By the way he thinks it’s around 2020, just thought I’d tell you that, so there you go, two years’ time.  Okay, maybe we leave it there for this week, Alan.

Thank you, James.

You’re welcome.

Please subscribe to the Money Café on iTunes.  Leave us a review, tell your friends, we’d appreciate that.  See you next week, James.

See you, Alan.