Putting the pieces together

Investment Analysis Clubs Saul’s Investing Discussions
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In trying to understand what’s happened recently to the companies we follow, it’s important to make sure you look at the whole picture, so you don’t take away the wrong lesson, like I believe bashuzi did here: https://discussion.fool.com/i-sure-hope-you-saul-and-other-vetra… (Sorry to call you out, bashuzi, but saying “the market is trying to tell us something” is the perfect example of what I want to discuss below.)

Here are the pieces as I see them:

  1. I’ve talked about how much the prices have dropped. That is the first and undeniable fact.

  2. We also know that when companies report a quarter with revenue growth of 50% or 60% or more, the PS drops by more than the share price has dropped. It’s a multiplier of the “bargain” or let’s use neutral language and say “less expensive price.”

  3. We also know as Saul points out that these companies haven’t faltered, and that the business models these companies have will make them MUCH more valuable in the long term. https://discussion.fool.com/an-quotaveragequot-company-isn39t-gr…

  4. We also know that as several on the board have discussed at length, these companies are leaders in their spaces – innovators that are changing things. Sure, some will slow down faster than others, but in general this is a burgeoning space to be in, where continued exceptional growth is more than possible.

  5. We also know that this is not a market panic or recession – the S&P is within a few percent of all time highs. What we’ve seen is a re-evaluation of the multiples people (financial institutions) are willing to pay for these companies. We can theorize, but we don’t know exactly why, why now, how long it will last, if it will stabilize, if it will get more intense, or if it will reverse.

Those are the facts. Let me discuss some possible conclusions and courses of action:

  1. We’re at the bottom, and we should leverage up to the hilt and buy buy buy!

  2. “The market is trying to tell us something.” These companies are suddenly going to stop attracting customers and maybe go bankrupt. And/or a recession is coming which will drag everything down and our stocks will fall further! We should go to cash.

  3. We’re not very good at figuring out tops and bottoms, or predicting recessions. We should realize the valuations of our companies are at a relative low point, but that things can always go lower. The thing is, if we were sitting on cash “waiting for a drop,” we got our drop. So it makes sense to be fully invested and hope for the best. But be ready come what may.

Spoiler alert, I think #3 is the way to go. One thing I always try to do is think, “What if I had just found this board today? What if I read the entire 60,000+ posts and realized what had been going on here, and I wanted to decide what to do about it?” Well, in July, I know what I would have done. I would have dipped a toe in probably, but I would have been terrified at AYX with a PS of 32 or whatever, and ZS with a PS of 40+. Etc. Etc. That’s changed now. If my money were in bonds or funds or anywhere else but exactly where it is now, I would move it as fast as I damn well could. I caught myself looking around the house yesterday wondering if there was anything I could sell.

I’ll stop. The part of this that’s an evaluation of how or whether we should time the market is completely off topic. The part of this that’s a reminder of what special companies we’ve found and how we should view them going forward is completely on topic. Please allow me some latitude – I want to give the board a balanced and long-pondered perspective. Not an emotional crutch, but a reasoned position that perhaps will help you resist reducing your exposure to what I believe is exactly the right place to be.

I do not know how the market will react when our stocks report on their quarters in a few weeks. I suggest that you don’t primarily pay attention to that, but rather pay attention to the company results and outlook. I think we’ll see what we’ve seen for several quarters now: extremely impressive strength.

Good luck.

Bear

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Hi Bear,

I enjoyed your post especially the part about you looking around for stuff to sell to buy more stocks!

I’d like to add one fact to your list. In the recent history preceding the drop that started in late July, the EV/Sales multiples for Cloud software companies had been expanding to what I believe was an all-time high. This multiple expansion (as multiples do) takes into account the realized revenue growth of the recent past. So for me the key question is the following: was this inflation of the multiple justified or was the recent valuation justified? The answer may not be black and white as it is a matter of degree and both could be right (they may have been too high but then dropped too low). I don’t know. Saul has believed that the multiple expansion was justified (i.e. others have finally caught on to our SaaS secret). Again, I don’t know. But I know that looking only at the steep drop and ignoring the multiple inflation preceding the drop is probably anchoring to the July highs.

So last night, I started putting together a framework to look at SaaS history in publicly traded companies. An obvious company to examine is Salesforce, the grand-daddy of the pure play Cloud companies. CRM was founded in 1998 and has been public since 2004 (with the S-1 financials going back to 2002). That’s 17 years of history and 15 years of stock price history. But it’s only an N of one so I looked for other Cloud software pure plays. There are other companies to example but as far as I know none go back as far as CRM:


Company	IPO Date	MarketCap   Years of history (without S-1 data)
CRM	June 2004	126.4	    15
NOW	June 2012	 45.6	     7
WDAY	October 2012	 35.2	     7
VEEV	October 2013	 21.1	     6
PAYC 	April 2014	 11.9	     5.5
HUBS	October 2014	  6.5	     5
TEAM	December 2015	 28.4	     4

I haven’t done an exhaustive search and there may be other Cloud pure plays that I could add to the list. Please let me know if you have any suggestions for companies to include.

Weiss examined the EV/Sales multiple over a 5 year period. I’d like to go back farther and also be more deliberate about which companies I include in the analysis. I’m looking for some insight into how high the EV/Sales multiples were in July in the context of a longer history (and also to get a perspective of the range the multiples traded in in a longer history). I think that I will place more weight on the larger market cap companies (CRM, NOW, WDAY, TEAM) because I do want to bias the analysis toward the companies that ended up being dominant successes; the reason is that I do believe that we have picked smaller, less mature versions of these successful, mature companies.

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Hello Chris,

Thanks for kicking this analysis off. There is certainly merit in getting our heads around some sort of metric for these companies if only to understand them better. Hindsight is always 20/20 and I wish I had done some of it back in June when sitting on 101% gains. One idea: It may be productive on some level to also include the plethora of companies that have been bought out by the larger established players at the valuation at which they were purchased. While not necessarily current information, it would give us a track record of sorts For these SaaS companies. Oracle, SAP, IBM and Microsoft, for example have been buying up these companies for quite some time at a variety of valuations and multiples and I fully expect the consolidation and land grab to continue as software and the cloud companies cement their replacement of hardware, and especially in the event of a recession. Off the top of my head: PeopleSoft, NetSuite, Siebel, Qualtrics, Talio, Rightnow Technology, Corio, BEA systems, Hyperion…among many, many that have already been gobbled up. Just a thought… look forward to discussing in person. -V

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I’ve given you some of Bert’s thoughts, and those of Charles Schwab. Here’a another view related to Bear’s take. I just received a marketing email from Mitch Zacks, the eponymous head of Zacks Investment Management, and a really smart guy. Here are some excerpts, edited and shortened. Bolding is mostly mine…:

"Are Investors Over-Compensating for Recession Risk?

October kicked off with some weak economic reports. … U.S. factory activity continued its slump, with the manufacturing index falling to its lowest level (47.8) since June 2009. Global manufacturing activity also remained firmly in negative territory in September, posting its fifth consecutive month of contraction. Nearly every major economy took a hit, the report said. Markets were rattled by this data, and recession chatter followed.

I’ve seen this pattern more in 2019 than perhaps any other year in this decade-long economic expansion: market watchers and prognosticators cling to the slightest whiff of economic weakness and use it to declare imminent recession. Whether it’s the trade war, the inverted yield curve, weak corporate earnings, negative interest rates, or some other concern, the refrain is that this economic cycle is doomed – soon.

There’s also been a notable response in the equity markets to rising fear of recession. I’ve been observing a notable rotation away from cyclical sectors and towards defensive sectors. In the third quarter, Utilities was the top performing sector (+9.3%), followed by Real Estate (+7.7%) and Consumer Staples (+6.1%). Since September 30, 2018 (roughly over the last year), Consumer Staples and Utilities have been at the top of the performance chain, with Staples outperforming Information Technology by a margin of 2-to-1 and Utilities outperforming by a margin of 3-to-1 (Saul: Are Utilities and Consumer Staples really where you want to be?)

Investors have also been hedging in other ways. There are nearly 2.5 times the amount of put options on the S&P 500 Index as there are call options, and the cost of hedging has soared to one-year highs across several equity benchmarks.

The demand in the market to go defensive is clearly high, but in my view, investors might be over-compensating – and over-paying – to defend portfolios against a recession that may not be as imminent as many believe.

As investors rotate, or consider rotating, into traditionally defensive sectors like Utilities and Consumer Staples, many may not realize that the Utilities sector’s P/E ratio is at an all-time high. The Utilities sector’s P/E has risen ahead of previous recessions as investors have made similar moves, but never to this degree. It is now the most overvalued sector, in my view. Consumer Staples is not far behind, which has me convinced that investors are over-playing the defensive hand and paying dearly for it.

The Recession May Not Be as Near as Many Believe

Manufacturing data was quite weak and there are clear signs that global growth is slowing…. But few reports point out that manufacturing only makes up 10% of U.S. economic output, and that the U.S. and global economy are still expected to grow north of 2% in 2019. Service Sectorsin most developed countries remain strong and expanding, and the U.S. consumer – which comprises some 70% to total U.S. GDP – continues to spend at a healthy clip….

I’ll share a few more data points to support my argument. Small businesses, which are often considered a key growth engine for the U.S. economy, have been increasingly reporting labor shortages, where 57% of owners have said they’re hiring or trying to hire. A majority of these business owners have reported finding few, if any, qualified applicants for open positions. This points to strength in economic activity, and also points to a skilled labor shortage in the US (a good problem to have, in my view). A key takeaway from the NFIB Small Business Jobs Report is that “hiring has slowed down, but it’s due to the inability to find qualified workers, not because of a lack of customers.”

The U.S. consumer is another proxy for the health of the U.S. economy, and signs point to steady spending as we enter the holiday shopping season. Total retail sales for the June 2019 - August 2019 period was up 3.7% from the same period the previous year, with a particularly strong showing in July. In the latest ISM Non-Manufacturing report, the statement from the Retail Trade sector was that “business continues to pick up as we quickly approach Q4. Week by week, we inch closer to a much-anticipated holiday retail season, which requires not only last-minute buys, but a push to fill open positions.”

Finally, data in the broad labor market also offers evidence of the U.S. economy’s stability. Job growth as measured by non-farm payrolls remains strong, with reports last showing that the U.S. added 136,000 jobs in September, bringing the jobless rate (3.5%) – its lowest level in 50 years."

Just some more thoughts from smart people to help you relax on the weekend.

Saul

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Hi Bear,
I liked your post but it seems that your options go between two extremes but don’t focus at all on the very likely middle.

I think the markets are doing two things. One, as Chris mentions in his response, is a reaction to the very fast increase in multiples over the last 9 months since the December lows. Just like the periods when the stock prices went up very fast, we are now seeing the opposite.

It’s a little biased to think that when a stock goes up by 25% in between earnings reports (no real news) it is totally okay and expected, but when they go down 25% in a month or so, something must be seriously wrong. Even for a company that is growing by 50%/year, we can’t expect the stock to slowly climb 4%/month. That is just not the way it works.

But secondly, the market may be saying that with a recession coming (I don’t know that, just saying it is possible and is certainly being discussed a lot) that it is expected that the growth rates are going to slow. It is a fallacy to talk about sales needing to dry up and the company go broke for the stock price to fall. These stock prices have huge P/S ratios as everyone is aware. If the growth rate starts to slow down faster than expected, then the prices are too high. Further, if either the addressable market is not as big as expected or if their market share drops (new competitor or existing one getting better) the stock price is also too high.

The fact that the entire sector has dropped even when the overall market hasn’t, could mean that there is some type of reassessment as to the future growth of the industry. It certainly doesn’t mean that the reassessment is correct. It could also just be market fluxuations. These stocks have gone up a lot and if they start to fall, it causes momentum traders to decide to get out while they still have profits which causes more people to get nervous and decide to get out. This could go on for some time. There really isn’t any way to determine how much more there could be.

Who knows. The only important question is how much more growth do they have and how profitable will they eventually get. And if their growth will continue even if the economy falters. I imagine that some of the SAAS type companies have a better shot at thriving in a recession than others. It seems that it would be good to know this… A product that saves money over time or increases sales but costs money to implement in the short run, may have a more difficult time in a recession than one that saves money immediately. I am not even sure how to determine this but certainly would be good to know.

I need to think about how to determine this, a seemingly very worthwhile effort.

Hopefully this is not considered off topic…

Randy

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I liked your post but it seems that your options go between two extremes but don’t focus at all on the very likely middle.

Randy, I gave three options.

It’s a little biased to think that when a stock goes up by 25% in between earnings reports (no real news) it is totally okay and expected, but when they go down 25% in a month or so, something must be seriously wrong.

I said the opposite. I said nothing is wrong with these companies or these valuations. In fact I said valuations were too high a couple months ago!

The rest of your post could be shortened to “but there could be a recession!”

I’m sorry, but I think you’re the one who is far to one side of the “likely middle”.

Bear

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The market has predicted 9 of the last 5 recessions.

Sorry to say the market is not as wise as some are making it out to be, especially when it comes to macro issues.

Macro issues are darned hard to predict. Which is why some people don’t do it and just stay fully invested.

And remember the market doesn’t seem to be predicting a recession with the S&P 1% off it’s highs. This is the same sector rotation we’ve been talking for months now. And these growth stocks, ranging from cloud databases to colon cancer screening, to cloud procurement software, cannot possibily share the same fate as if they are all in the same boat. So the selloff cannot be related to the outlook of each individual company, but more sector rotation.

Seems we keep going in circles on this.

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Chris,

We have been considering the same thing at roughly the same time especially with respect to mature SaaS companies, namely Salesforce. Here is what I’ve written elsewhere just for some further information. It is nowhere near a complete analysis, mind you.

For ZS to get to a mature P/S of 8x in the above, we have to wait two years with no stock appreciation or just enough to cover dilution. CRM would drop to about 5x assuming 20% growth at the same time.

…I really should look into CRM a bit further…

I took a quick look at Salesfoce and while they are the granddaddy of SaaS, their metrics are very good but not great particularly related to cash flow and dilution. Based on FY guidance which I believe is 6 months out, they sport a PS of 6.35x and a PE of 50x. Gross margins are 78.5%, cash flow seems to be around 12% and dilution was 6% over the year.

Let’s compare that to Adobe who I just looked at briefly. They generate tons of cash on the order of 35+%. Share count is going down. Based on Q4 guidance, PS will be about 11.8x. Cash remains king and so does the fact they aren’t diluting shareholders.

Then we can take a look at a company like Arista who is altogether different but is generating tons of cash with some, but minimal dilution. They sport a trailing PS of 8x and a PE of 23.6x.

So what does this mean for the companies we currently hold? Trying to analyze that is much more difficult, but we can see that a very solid company with a PS of 20x might contract 40% down to a valuation similar to Adobe as an example. However if revenue less dilution is growing at the same pace, there is no contraction (but no growth) in price and at some point these companies will have growth more centered around actual revenue, cash flow and earnings growth.

So far, this is all I’ve got and trying to parse specific reasons for different valuations is hard and may not be worth a ton of effort, but it doesn’t give us some measuring stick. I’d be interested to hear what others have to say.

A.J.

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Hi Bear,
I didn’t take a position either way. I thought I went through a number of reasons the market is doing what it is…

  1. just a market reaction, just like they went up fast, they can go down fast. This is not even surprising to me. (And I didn’t mean to imply you didn’t say they were expensive, I know you have). But this doesn’t mean the market reaction is over.

  2. The market is telling us something, but it could be that it is just telling us that it had over estimated how much growth there is and the prices were too high. Not necessarily that they are going broke as you implied, just not growing as much in the future and so is resetting “fair” prices. One cause could be a recession. But this doesn’t mean that the market is done telling us or is even right!

That second one was I thought more toward the middle of your two options…its a bottom buy up! Or the market thinks these companies are going under.

Your third option was, we don’t know and cant know what will happen in the short term… I agree with this but it is not really an option between the two so I didn’t mention it. It is just a fact.

But in any case, i thought I was adding to the discussion, not trying to say anything was wrong with your post. It seems you took it that way, if so I apologize.

Personally, I finally have started adding just a little Friday, but I have a decent amount of SAAS stocks already and am hesitant to add a lot more…

Randy

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A product that saves money over time or increases sales but costs money to implement in the short run, may have a more difficult time in a recession than one that saves money immediately. I am not even sure how to determine this but certainly would be good to know.

First off, there is no product that saves money immediately.

When companies perform a financial analysis related to an internal software investment (I am speaking from years of experience at the company I worked for, but I’m reasonably confident about generalizing this. BTW, this is true whether the s/w is internally developed or purchased) there are two different financial analysis they look at: ROI over the “life” of the product. If I recall correctly, the “life” is five years as this is the standard depreciation schedule for software. Where I worked, ROI was usually present in a tabular format showing annual columns of costs and returns expressed in dollars. Overall ROI had to achieve some threshold before the project would get a green light. The threshold was not fixed but varied from year to year depending upon competing projects, but a minimum of 20% sticks in my mind.

The second analysis, which speaks directly to your question was referred to as the “hockey stick.” This was always presented as a graphic (hence the name) with zero dollars as the boundary condition on the y-axis and time (in months) as the x-axis. Every project, no matter how spectacular the ROI, initially drops below the zero dollar boundary due to acquisition costs, training costs, process change, possible data remediation and conversion costs, etc. But, at some point the benefits kick in and the curve (actually, this tends to be pretty linear) reverses direction and ascends to and past the zero dollar boundary. The elapsed months between initiation at zero and the zero crossing at a later point in time is called the “payback period.” The graph resembles the shape of a hockey stick, hence the name. As you noted, projects with rapid payback (a subjective amount of time, I don’t recall any maximum value as an automatic disqualifier) were usually looked on more favorably than those with a longer payback period. But, there’s more than one rub. For example, payback is incredibly hard to assess when addressing risk reduction. What are the cost savings of an averted database breach they may or may not even occur?

These are not the only criteria. Some projects are costly and get a green light irrespective of ROI or payback. Two that come to mind were Y2K (the press hype far outweighed the risk) and SoX (Sarbanes-Oxley legislation) which was passed in the wake of the Enron scandal. I’ll interject as an aside that if you actually looked at the accounting shenanigans at Enron you might have noticed that none of them involved faulty financial computing systems. They involved executives feeding the existing systems erroneous data involving phantom companies that inflated earnings and hid costs. It was never clear to me why SoX became an expensive, high pressure IT project. The big accounting firms made a bundle on SoX as they advised their clients about the necessary IT changes required to become SoX compliant, none of which precluded management from playing the same games again. But yeah, that’s an aside.

In any case, it is not too terribly hard to look at the product suites of our companies to guesstimate payback period (except the cyber-security stuff). I would take and educated guess that Zoom for example has a fantastic hockey stick. It is easy to install, it has close to zero training requirements and it displaces high cost, problem prone competition that does not do the job as well even when working optimally. Even in the security arena, my guess is that Okta has a pretty good hockey stick even though it involves considerable data conversion (every company of any size already has a user registry of some sort). Zscaler probably also has a pretty good hockey stick, but is a tough sell due to sunk costs of the installed base of competitive products and organizational issues unrelated to the financial analysis.

I don’t intend to go through each company’s offering and make a guess at the hockey stick. If you really want to get an idea about this I suggest you peruse the web sites of investments you already hold or are interested in acquiring. They will all provide some insight about on-boarding which will probably give you at least relative information.

But, one caution. This might not be as important as you think to begin with. Mongo is incredibly easy to on board as techies can use it for free and become very adept with the product. BTW, die-hard techies tend to do this kind of thing in their spare time at zero cost to the company. But Mongo utilization is a big commitment as database products reside at the very root of operations and once implemented tend to live for a very long time (look at Oracle for an example). I also just mentioned Zscaler which has a hill to climb that does not directly involve the financial analysis. There are a host of considerations when large companies evaluate products, the payback period is important, but it is just one of many factors.

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To all of these comments I would remind board members about the market’s animal spirits. No, not the bulls and bears, but bulls and rabbits. The down side of the market is nothing like a bear, instead, the down market is more rabbit-like. Investors run from the least little noise, twig snap or ill breeze. They don’t analyse but run first and then think. What we are seeing is the rabbits taking over.

Many years ago I read an analysis by Ken Fisher. He had looked at years of market forecasts by leading market prognosticators. What he found, every time, its that the consensus opinion was ALWAYS wrong. This research is now probably 15 or 20 years old, but I am guessing it is still on target.

I came late to some of these stocks and overpaid on a couple, compared to current prices. But, I am not a rabbit. I bought companies producing real products, with real growth. I am not going to bolt, but bide my time. I thought the price OK in May, I am sure they will be OK again.

Gordon

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Etagordon - Your comment/analogy is an excellent reminder. I want to share a similar analogy. I worked for a large insurance company supporting the Investment Department. Back in the 2008 - 2009 timeframe we used to have update luncheon’s where the leaders of the investment department would come talk to the entire department (lawyers, systems programmers, accountants) about timely topics/outlooks. We had a Vice President come in and he gave an analogy about all the animals of the forest coming to a pond and drinking the water. There would be a disturbance and all animals would scatter all at once. But, when they returned, they dribbled in only one or two at a time. It seems like the Saas Companies have had a disturbance happen, and everyone is leaving at once. They certainly are not performing due diligence in leaving, they are just scattering. I am hoping that happened mostly last week (and basically since late August). I am hoping Friday (10/18) might have represented to capitulation point. There was no really big news. Smart investors will start drifting back in, but it will not be as quickly as the recent exit.

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I really don’t understand the panic about our stocks.

I started investing in january this year with absolutely zero knowledge about the stock market.
Unfortunately I didn’t know fool.com, Saul, Bert or others back then (learned so much since then). This is why i began building my saul-like Portfolio just 2 months before the “massacres”.
Fortunately I just built starter-, or half positions, so I feel rather excited about the current situation instead of being scared (writing this while most of my “worst” performers are at -25% e.g. ZS). Some (or most?) of you guys are at +30% YTD even after the big “sector rotations”. I would be so relaxed in your situation and just invest more into excellent companies.

This is such a huge opportunity, and I am really happy to see this situation so clearly. This board, Bert etc. helped a lot. And I also suggest to subscribe to Berts Ticker Target Newsletter, which is giving you a lot of insights and confidence (no this is not an advertisement).

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The ones who has been heavily invested into these few SaaS have reaped large gains over the past couple of years assuming they got in 2 or 3 years ago and held. Several of those stocks just IPOed recently over the past year or two and have run up very fast but are now descending even faster.

For those people, you tell them to hold? You hope these stocks are going to bounce back quickly just like they did before? It seems to me that the big money has gotten into the head of many that most in this SaaS sector are ‘too expensive’, and regardless if a recession hit or not, the flow is out of there at least for now. The party may be ending. The Workday conference(Coupa…) and many comments from these SaaS about slowing growth and customer acquisitions have turned opinions and outlooks on a dime.

The people who are not ‘all in’ those stocks should not feel as much pressure. Most of the stocks talked about in here have good characteristics for the longer term. They are not so worried that these stocks have fallen 30% or 40% over the past few weeks. They have time and maybe are glad that these stocks fell as hard as they did, and they wish they will fall further.

tj

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Hey guys Bloomberg just posted an article,
basically stating that Wework IS the main culprit for the start of the software selloff from Hedge Funds.
Also goes into how Semi’s have been held at all time lows from Hedge funds but that their earnings growth is expected to beat softwares earnings growth next year.
Here is the link:

https://www.bloomberg.com/news/articles/2019-10-19/fresh-blo…

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For those people, you tell them to hold? You hope these stocks are going to bounce back quickly just like they did before? It seems to me that the big money has gotten into the head of many that most in this SaaS sector are ‘too expensive’, and regardless if a recession hit or not, the flow is out of there at least for now.

Just because someone holds a stock that is down, or suggests holding it, doesn’t necessarily mean they assume that the stocks are going to bounce back quickly. Some stock may. They all might. At least to my own investing decisions, whether they bounce back quickly is not really pertinent or something I am thinking about or worrying about.

The past is the past. All that should matter now is, based on today’s price for these companies, and what I believe they can do over the next three to five years, is my money better off holding investments in these companies vs other companies or vs cash or another investment vehicle.

For me, the answer is easy, but others in different stages of life or situations may have other factors that play a role.

If these companies grow at 50% or more for the next year or two, then even with further multiple compression, the stock prices could still go up 20-30% per year, which I would take all day long. With no further compression and no multiple expansion, the stock prices would rise 50% or more per year. Of course there is a very real risk that multiples could compress further and the stock prices could stagnate or go down. Especially given how much the multiples have come down in recent months, I like the cost/benefit of holding these companies a lot here.

Whether the market rewards their stock prices with a higher price this year, or next year, or in 2021 really doesn’t matter to me, as long as the company is performing to my expectations, I won’t lose sleep.

-mekong

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Of course it does not mean that one would expect that bounce but I think many in here are. That is not the point. The point is that less concentrated and longer term holders have less pressure on the line. They committed the money and they are in for the longer term. This is not the way it is played here you would agree?

tj

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