Negative crude oil price, industrial materials update

Albert Lu: Welcome to Sprott Media. I’m Albert Lu and I’m joined here once again by Rick Rule, president and CEO of Sprott U.S. Holdings. Rick, great to see you. How are you doing?

Rick Rule: Very well, Albert, and thank you for making this work during lockdown. I appreciate your technological skills.

AL: The discussion today is going to be industrial materials and I think it’s going to be an excellent discussion for investors out there. I want to lead, though, with something that happened this week. I know you spent a lot of time in the energy market, Rick. And what we had is something very strange in WTI.

You have essentially oil flowing into what is essentially a landlocked hub, with diminishing storage capability. You have a futures contract linked to that, without a provision for cash settlement. And what we had was the front contract for WTI riding that contango curve down, crashing into the spot price, through the spot price, and actually going negative for a little while.

I just want to ask you, of all your years working in energy did you ever imagine that you would see a negative price for oil?

RR: Albert, nothing even close to what we witnessed. And it’s a testament to your financial mind that you were able to describe it so succinctly. There’s a whole bunch of lessons here. One is the perils of securitization, because these financial instruments are put together by people like me, who don’t imagine all of the things that could go wrong. The idea that you would have to pay somebody $30 a barrel to take the obligation, to take oil, is highly amusing.

The circumstance, of course, relates back to the discussion that we’re going to have today, in many ways, the most important of which I guess is that we have witnessed, as a consequence of the unwinding of 10 years of economic growth and, in particular in this case of the economic slowdown fashioned by this virus, an astonishing erosion of demand.

You will recall that oil markets had been weak for some time. There has been for probably six years a pretty strong amount of surplus-producing capacity. This capacity itself is, I would suggest to you, a function not just of the technologies that you and I have talked about before — fracking, three-dimensional seismic measurement while drilling, horizontal drilling— although all of those have been important, because the real increase in oil production on a global basis has been American and that American production is extraordinarily capital intensive despite the technological advances that we’ve talked about.

I would argue that unnecessarily, and unusually, and I might even say stupidly, generous equities markets and manipulated debt markets — which is to say extraordinary liquidity and artificially low interest rates — were really responsible for the production boom to a greater degree than any advances in technology.

Now, we had a situation where a market was oversupplied and the consequence of that oversupply was that existing exporters were having to make room for increased American market share. Two principal competitors — really three principal competitors, but two in this drama (Russia and Saudi [Arabia]) — were competing with each other both for prime Asian markets and prime European markets [and] couldn’t come to a conclusion and decided stupidly, I think, to duke it out.

On top of that, of course, the COVID-19 virus really, really, really reduced demand. A year ago global demand was estimated depending on the season and the circumstance to be between 95 and 97 million barrels a day — sometimes falling a little, sometimes increasing a little.

The consequence of the COVID-19 virus is that estimates suggest that up to 20 million barrels a day in demand went away. The fact that you don’t encounter any competition on the freeway and can’t fly anywhere is ample testimony to the reason behind that statistic. So you had a circumstance where the world was oversupplied at any rate and then a whole bunch of demand went away and it didn’t go away slowly.

This isn’t something like electric vehicles reducing the auto fleet over 30 years. This reduction in demand happened very, very, very quickly. And then, as you say, the futures contract, but, in fact, also the U.S. physical infrastructure had some challenges.

The oil couldn’t be sold. It began to back up first of all, of course, in the producers’ tanks, and then in the processors’ tanks. And then in the transmission system. And finally it came to one of the largest tank farms in the world, in Cushing, Oklahoma, and at the end of the day there was no place to put the oil.

As you suggest, this is a circumstance that has never occurred even in remote fashion in my life. I have certainly seen booms and busts. You have heard me say in these interviews that bull markets are the authors of bear markets and that bear markets are the authors of bull markets and that the cure for high prices is high prices.

All those sort of market homilies are all true, but normally this takes place over two or three years. To have this disruption in the market in this brief a period of time isn’t merely unprecedented in my lifetime. It’s unprecedented in the history of the modern oil industry.

AL: Rick, there’s so many, I think, lessons illustrated by what happened this week so I hope you’ll be patient as I walk through these questions that are just exploding in my head. One thing that I’ve observed, that we’ve observed, is the difference in the behavior of people who purchase derivatives.

I guess the uniqueness of these markets, the derivatives market versus the spot commodity market, and that something that we call oil can be many different products simultaneously. So you have the spot market in WTI. You have the derivatives based on that. You have Brent Crude, which didn’t go negative; it supplies a different market. There are parallels of this to the gold market, where you have, for example, bullion coin sales. You have good delivery bars. You have futures contracts on those. All of these are distinct and I think there might be a lesson for the investor in terms of how to look at all these different products that are derived from the same underlying element — gold.

RR: Albert, I think you raise many, many good points there and you’ve raised them so well I’m tempted not to respond to them, so that your description sticks in the investors’ minds rather than anything I might say. But I’ll try. You make the point with the plethora of products that are available based on a certain subject, be it gold or oil or something like that. It’s incumbent on the investor really to have an understanding of his or her own motivations and needs when they are choosing a product as you discuss.

Almost all oil burns but the market for oil is specific to function and specific with regard to geography. It is true in fact that some of the European storage facilities — Rotterdam, as an example — are also at record high levels. The truth is that almost all land-based oil storage in the world is having constraints as a consequence of the fact that we are just burning so much less, burning so much less that mothballed oil tankers are being brought out of what’s almost scrap inventory to serve as floating storage facilities. That’s interesting.

But it’s incumbent as you suggest that an investor who is interested in the topic [of] oil understand what he or she means by an investment in oil and limits their investments to products that suit their circumstances and suit their needs. You can imagine a leveraged oil trader trying to play something with regards to what he or she believed was the oversold global macro in oil and ran into a circumstance where they were out of storage capacity.

[The trader] could have been right on the overlay [or] could have been wrong on the overlay but never anticipated a circumstance where 15 million barrels of demand would go to demand heaven and the consequence of that would be that the tanks would be full and there would be no place to put one’s contract. Very interesting circumstances.

Similarly, as you suggest, if you believe gold is going to go up, the right place to start is by buying gold. Gold stocks move later. And if you buy gold do you want to buy retail physical gold for delivery to yourself? In that circumstance, you need to understand that because everybody else wants to buy it, too, the spot price isn’t necessarily indicative of what you’re going to have to pay.

You’re going to have to pay a good premium. And then after you’ve bought it, what are you going to do with it? Too often speculators tell me that they bought it and they’re keeping it at home. I laughingly call that midnight gardening, which exposes that speculator to a whole different set of risks, including being visited by people with pistols who they normally wouldn’t invite over for lunch.

So you make an extraordinarily good point. In an increasingly complex world, the ability to invest in a theme has more permutations and combinations, in the sense the market is serving more needs. But it’s important to recognize as an investor that one size certainly does not fit all.

AL: Rick, I’d like to highlight something that you said early in the conversation because that was one of my points as well, which is that the oversupply in oil is a result, for many reasons, of government intervention. In the case that you mentioned, in terms of the capital markets and borrowing rates, government creates a lot of distortions in the markets and some can hurt you and some can help you.

I think the distortion that we’re seeing now is one of heavy inflation, massive intervention by the central bank, huge, increases in the balance sheet. This, unfortunately, is yet another distortion, but it’s going to be a distortion that people may be able to profit from because of the effect that it’s going to have on things like gold and other perceived stores of wealth.

RR: Albert, I think every investor needs to pay attention to precisely that distortion and every investor needs to think about how that distortion might play out in the future. I have my own ideas. I need to say at the beginning of this interview when we’re expressing ideas about circumstances that will take place in the future, that nobody knows truly what the future will hold. And we have never been through circumstances such as the circumstances that we are living through today. So there isn’t much prologue in the past.

Further, as a disclaimer, Buffett famously says predictions tell you a lot about the predictor but not very much about the future. Having said that I think that we can talk about probabilities.

A circumstance, first of all, where you issue out of thin air a whole bunch of currency units — they call that quantitative easing. You and I call it counterfeiting.

Whatever other impact it might have has the impact of debasing the currency and if you debase the currency aggressively enough — think Weimar Germany, think Argentina, think Mexico — you reduce to the point of perhaps destroying faith in the currency.

Now, I don’t believe that’s going to happen in the U.S. for a very long time. That is, I don’t believe that they’re going to destroy the U.S. currency, but I think they are going to sadly damage faith in the ongoing purchasing power of the currency.

I think that savers and investors are going to be concerned about the value of the U.S. dollar three years hence, five years hence, six years hence. While I’m not certain that that’s true, I believe it’s more likely than not to occur.

The second circumstance that investors need to think about that is, again, a consequence of government and is a particularly impressive concern right now — I would suggest we’ve talked about it before is the impact of both debt and deficit on balance sheet and off balance sheet — but recourse liabilities to the federal government exceeding $120 trillion and that number being added to by the federal deficit between $1 and $2 trillion a year. It’s pretty obvious to me that there’s no particular way out of this conundrum that’s pleasant.

It seems to me that at some point in time in the future and maybe the not-too-distant future, that we have to have either some form of formal defaults. That is, that we need to disavow the obligation with regards to some of the off-balance sheet liabilities, which will be politically extremely difficult, given how much people rely on them. Or we will have to inflate away the net present value of the obligations. In other words, if we have a fixed dollar obligation to somebody, we will have to make the pain of making that fixed dollar payment less egregious by inflating away the net present value of that obligation.

And then, finally, of course, there are interest rates. The artificially low interest rates do a few things. They penalize savers at the expense of spenders. But they also damage faith in and demand for credit instruments, in particular, U.S. Treasuries. The idea that the U.S. 10 Year Treasury, which is the world’s benchmark security, the security that everything else is ultimately priced against, yields, as I believe the current quote is something like 60 basis points, six-tenths of 1%.

The idea that they pay you six-tenths of 1% in a currency that they acknowledge is depreciating in value by 1.6% a year means that the reward you get for taking the credit risk and forgoing consumption now to enjoy that consumption 10 years hence is that you lose 1% a year compounded.

Our friend Jim Grant, I’m fond of saying, calls that return-free risk. So when one considers the impact of the collective of society, of government, on one’s investments, one must consider first of all the artificial impacts of liquidity and the fact that this liquidity, this quantitative easing, is, in fact, by definition debasing the currency.

Secondly, that the balance sheet and the income statement of the U.S. federal government is increasingly fraught, and there is no pleasant way out of that. And third, that we are due for continued credit market disruptions because a circumstance where there is negative nominal interest rates is not a state of nature.

It is a state of perversion really. I don’t know how it will end, but I know that between now and the time that we do know how it will end that there would be plenty of risk and plenty of volatility, and I have absolutely no doubt that one arena that all of that will be played out in is, of course, the industrial materials markets, which are capital intensive, interest rate sensitive and, of course, economically sensitive.

AL: Rick, I appreciate the disclaimer. Obviously, neither of us know what the future will be, especially when it comes to prices and whatnot. But we can state certain facts and there are intelligent investors out there watching who can draw their own conclusions. One of the facts is that the Federal Reserve is pushing interest rates to almost zero. That the market is taking Treasury bill interest rates negative.

This is nominal. In a real sense all those interest rates are already zero or negative. We also know that the big thinkers of the world, as you like to call them — people with PhDs in economics and advisors to the government — are already talking about not only quantitative easing but [also] yield curve control, which essentially amounts to them buying all of the Treasuries. And so I think the investor can draw their own conclusion from that. But I think it’s pretty clear where this is going.

I want to transition from here to, I think, the main course, Rick, which is other industrial materials and metals, in particular. There is one more lesson I drew from what happened in oil this week.

And that is, people who see the price go negative and hear the explanation, this is the layperson, says, well, why don’t they just stop producing the oil? It’s an obvious question to ask and there’s a big lesson behind that. And that is it’s not as simple as shutting in production. There’s a cost associated with that. There’s inertia there and I think we can draw parallels from the oil market to a lot of these resource markets where it’s not as simple as flipping a switch either way and either having your production come on or off.

So can you talk about that phenomenon in general and then pick any commodity you wish where that lesson might be particularly applicable now — aside from oil, obviously?

RR: What you say is very true. It is not as simple as simply turning off the field. These fields are enormously complex. I’m talking about oil fields, but I could be talking about copper mines or zinc mines or anything else. They need to be shut down gradually and very intelligently for two reasons.

Shutting down a productive facility be it an oil field or a copper mine incorrectly can seriously impair the mechanical functioning of the facility. But there are other factors too.

Physical factors, as an example. If you are operating an oil field by way of water flood extraction, you are using the water underground to move the oil towards the well, towards the well bar. Seriously changing the oil-water contact and the pressures underground can cause the water to break through the oil column and “cone the field,” breaking what was once a sort of contiguous 20 million barrel field into four (or five) 2 or 3 million barrel fields, an extraordinarily unpleasant circumstance.

Similarly, with an underground gold mine, as an example, if you shut it down and in effect walk away from it for a little while, very quickly it fills up with water and the water destroys all of the ventilating capacity, all of the electrical infrastructure downhole. So it’s not a matter practically of simply shutting it down, walking away and coming back when prices are nice.

Secondly, remember that these things are enormously capital intensive and often there’s a fairly substantial amount of bank credit involved against these types of activities. So when production stops, first of all the costs don’t stop.

But the other circumstance is that when, let’s say that a producer produces copper for $1.50 a pound. In a $2 a pound market for copper, that’s not a particularly healthy margin. You’re only making sort of 50 cents a pound. But on top of those cash costs of production you need to add back the costs of finding that copper mine. You need to add back the costs of building the copper mine. You need to add back the unsuccessful explorations and efforts where you didn’t find any copper mine despite looking.

And so, it might be that your real costs associated with that are $2.50 a pound and some of those costs stay here regardless of whether you produce or don’t produce.

The consequence of that and the consequence of the fact that producers try to win something called the last-man-standing contest — in other words, they try to be ready for production when prices rebound so they can capture the rebound — the function of all this stranded capital in the market and of the consequence of the last-man-standing contest is that producers generally produce through the total cost of production down to the cash cost of production and, for a while, below the cash cost of production as a consequence of stranded capital and last-man-standing contests.

Similarly, Albert, because this will change, four years from now or five years from now. When you match supply and demand by reducing supply, when supply and demand come back into balance, one normal consequence of that is that they come back into balance at prices that are low enough that the utility of the commodity is extraordinarily high to users.

Lower oil prices stimulate oil consumption because at lower oil prices there is greater variability of the utility and products that are made from oil. Similarly, low copper prices stimulate demand for copper both by eliminating substitution of other materials and making it unnecessary to conserve.

So in my career in resources, when you match supply and demand in a bear market by reducing supply, when demand begins to rebound either as a consequence of improved economic activity or simply as a consequence of the extraordinary utility of the commodity, and the prices of the commodities begin to rise, the industry can’t in the near term increase production, increase supply, to meet those demands signals.

This business is capital intensive with extraordinary lead times and it can take five or six years for the pricing signals in the market, from changing supply and demand relationships, to begin to increase supply. And that’s the real lesson that we learn in industrial materials markets. These are extremely economically sensitive, extremely capital intensive with very, very, very long lead times, as we’re about to see in the next couple years.

AL: Rick, if we look at the pricing information we’re getting regarding oil, if you look at what is now the front contract that would be June, you see something around $17. If you look at June year 2021, it’s back in the 30s. And I’m wondering how much of the decision not to shut in production has to do with perhaps optimism represented in that curve that next year things will be better? And how much of it has to do with loan covenants that require them to keep pumping?

RR: I think right now very little of it has to do with loan covenants. I think the lesson from governments to banks into the oil industry is we got to keep this thing alive. There are all kinds of covenants that are already broken, the most important of which are net present value covenants. In most senior debt facilities, the borrowing base is a function of the net present value of the proved developed producing reserves and that’s based on pricing assumptions.

The most common price index that we have seen have been between 50 and 60 USD a barrel. It’s pretty clear that there are major net present value variances occurring. There’s a big difference between even $35 a barrel and $50 a barrel on net present value basis, understanding that that $15 a barrel is probably the producer’s entire margin. So while there may be some technical covenants with regards to production, I think that other covenant violations will be more important in production.

I think your former reason is much closer to the mark. There is an understanding on the part of the industry that there isn’t any $17 oil, really. There’s oil that gets sold for $17, but it isn’t sustainable, and it isn’t sustainable for very long at all. There isn’t much $35 oil either, but that’s a very different discussion.

The cynical explanation at least with regards to the smaller producers is that if they decided, as an example, to stop producing, they would probably have to decide to stop paying salaries. And from the point of view of the people who run those companies, that’s a very unpleasant outcome, indeed. So part of it has to do with what you and I might laughingly call true yield or yield to managements. I’m not talking about the length and breadth of the oil in the mining industry, but certainly the self-interest of the senior employees in the companies is not something which is lost on them.

AL: Rick, there may be no $17 on a sustainable basis but my intelligence says that there’s a lot of $2 oil sitting in driveways and backyards somewhere in Texas, because that supply had to clear somehow.

RR: Yes, I mean, absolutely. Remember what Buffett famously says. In the very near term the market is of course a voting machine, and neither of us are usually comfortable with the way people vote. In the long term it’s a weighing machine and in this particular circumstance what we have really is a gigantic colossal mistake. You know, a mistake is too hard, Albert. It’s very difficult for me to understand how the industry itself would have had the ability to foresee a weakening economic situation all of a sudden give way, and give way in a 45 day period of time when the growth engine of world commodity demand, which is China, stopped, and then the rest of the world stopped.

In fairness, the circumstance that we’re seeing in West Texas, the immediate plurality of supply-demand, isn’t something I think could have been foreseen. Certainly many viewers, myself included, mercifully five years ago saw that the boom in West Texas was unsustainable because it was so capital intensive.

It was so reliant on cheap capital and the decline curves were so fast that it seemed to me that at normalized interest rates that activity was unsustainable. I just didn’t understand that the cure for this silliness would happen so quickly or what the cause of the cure for the silliness was going to be.

AL: Let’s talk about copper and related industrial metals. Rick, what is your basic strategy when the economy appears to be entering a severe slowdown? Is this the time to accumulate?

RR: It’s the time for me to accumulate, Albert. Most of our listeners probably don’t have the experience, may not be well enough capitalized, and may not be psychologically strong enough to endure the battering that inevitably arises from being early. My assumptions with regards to copper go something like this: We have been in an economic recovery for ten years prior to this year.

My experience — I’m not an economist — but my experience tells me the ten year long recovery, a ten year long bull market, ten years of economic expansion, however tepid, is an expansionary period that is very, very long of tooth and due to end of its own weight. I think this circumstance is particularly true because I believe that the author of this expansion was mostly excess liquidity and artificially low interest rates. I don’t see something that happened over the last ten years — like the emergence of China, which of course happened in the late 90s and early 2000s — I don’t see any quantum increase in technology or efficiency that allowed us as a society to be substantially more efficient in the last ten years.

I think that the economic recovery that we enjoyed was a financially engineered economic recovery. And it has been proven that as you rely increasingly on fiscal stimulus to buy growth, what you’re doing is you’re robbing demand from next year or the year after and you’re using that demand to goose the economy this year and eventually you run out of both rope and time. So my belief for some period of time was that we were going to run out of rope and time and we were going to enter a recession. When we did was a function both of government’s willingness to prolong it and voters’ and consumers’ and investors’ faith in the government’s ability to prolong. But my belief was it had to end.

I think this virus called the question in very dramatic fashion. It ended it. Now, we are attempting to deal with the slowdown that’s blamed on the virus by prescribing what I would suggest is larger doses of the illness as part of the cure — that is, rather than taking our medicine, rather than having a reset, what we’re trying to do is we’re trying to cure excess liquidity with excess liquidity.

I realize that the powers that be felt that they needed to unfreeze the lock up in liquidity in financial markets. I get that. I just don’t understand how they are going to forestall all resets with excess liquidity and when I think about commodities markets going forward I begin with the suggestion that the economic climate in the next two or three or four years will be substantially less benign than the economic climate of the last ten years. And traditionally, economic slowdowns, particularly if they are ultimately accompanied by higher market set interest rates, are very bad for commodities. That’s the bear case.

There is a bull case. In fact, there are two bull cases, and I expect the bear case and both bull cases to unwind simultaneously. The first bull case, of course, is that many industrial commodities on a global basis were, before the slowdown, already priced at less than the total cost of production.

Which is to say that the industry was in self liquidation, that liquidation partially offset by extraordinarily low cost of capital. But the truth is if the total cost to produce a barrel of oil is $60 and you’re selling that barrel for $45, you’re losing $15 a barrel and you aren’t able to make the sustaining capital investments that you would need to make, nor the new capital investments to maintain your productivity over time.

Similarly, in the copper business the incentive price to put new copper mines in production is about $3.50 a pound, even at artificially low interest rates. If your total cost to reduce, to replace the pounds that you’re producing is $3.50 and you’re selling at $2 a pound, it’s fairly obvious that the industry is in liquidation. And once again we return to markets working: The cure for low prices is low prices. The cure for high prices is high prices.

The bull case around the whole industrial materials complex is that we are beginning to destroy productive capacity and we are beginning to destroy it very, very rapidly. Obviously, as an example, the Saudi announcement six months ago that they were going to spend on the order of $600 or $700 million dollars in capital expenses in their oil industry. Not going to occur. They don’t have the money. Similarly, the enormous Russian investment in northern Russia isn’t going to occur.

People are curious as to why the Russian central bank ended their gold purchases. Pretty simple. They don’t have the money. So, in a circumstance where you can’t make capital investments and where your producing assets are extractive, which is to say that they’re self depleting, what happens is that you impair for a very, very long period of time, your productive capacity, and you match supply and demand with declining supply — which is, as we’ve discussed earlier, very bullish.

The second bullish fact, which most of us in the West don’t pay attention to, is simply the fact that there are 7.7 billion people on Earth, all of whom want to live like you and me. Now, unfortunately, a fair number of them are going to experience a pretty dramatic setback as a consequence of declining economies.

But the truth is over the last four years the poorest of the poor, the poorest 2 billion people on Earth have made dramatic, dramatic improvements in their living circumstance. Not good enough, I grant you, but from a commodities producer’s perspective that has been dramatic.

When you and I get more money, Albert, we buy services or we buy little pieces of technology that don’t use much stuff. But when poor people make more money, the things that they buy, that have utility to them, is stuff: better diets for their family, transportation, energy, and, in particular, electricity. There’s still a billion poor people in the world that don’t have access to electricity. They know what it is and they want it.

And so this circumstance where we’re destroying productive capacity at the same time that the increase in population and the ascent of man is increasing demand is stunningly bullish for industrial materials. But it’s stunningly bullish for industrial materials, in my way of thinking, after we have had a reset, after we have had a recession, after we have been through the set of circumstances that leads to this dramatic reduction in productive capacity that I’m talking about — long-winded story Albert — but that’s the way I see these markets. Pick one: oil, copper, zinc, nickel, agricultural materials. I think they’re all locked in the same trajectory.

AL: Indeed, Rick. Services, such as haircuts, will be in high demand in a few weeks. So if I understand what you’re saying [it] is that you’re willing to purchase into a tough market with the understanding that you’re going to be early and you’re willing to take your blows knowing that when we come out on the other end you’ll be well positioned for the rebound. Is that correct?

RR: Yes, I am, Albert, and I’m not necessarily recommending this for everyone. I have the ability to understand what a good project is. I know what balance sheets are. I know what income statements are. I’m very familiar with the Warren Buffett suggestion that you shouldn’t buy a share of a stock if you wouldn’t be willing to see it fall 20 or 30% more a month from now, so that you could buy more utilizing the same intellectual capital. Sadly, I’ve experienced that dozens of times, so I may be a unique buyer.

But the truth is I have two things that have served me well in my career. Maybe three. The first is I’ve always been able to surround myself with a good team and at Sprott I have 200 investment professionals worldwide who can help me look at these opportunities and, of course, we would be willing to help these viewers look at these opportunities too. So that’s one advantage.

The second advantage is related to that. I know what a very good project looks like, and a very good project will hold its value over time. I’m pathologically cheap, so I am a good value investor. I would rather underpay today and go through a couple years of pain than overpay four years from now. And finally, in the more speculative end of the market, I’m addicted to 10 baggers or 15 baggers.

I am addicted to stocks that go from $1 to $10 or $12, and you never have those opportunities when the outlook seems bright. Buffett famously says that the contrarian is brave when others are afraid, or is afraid when others are brave, or buys straw hats in winter. Well, in industrial materials unfortunately we’re just in late fall. We’re headed into winter. But certainly now is the time to develop the shopping list and I am certainly doing it.

AL: Rick, thanks for all of these suggestions and insights. I look forward to doing this with you again soon. I’ve been getting, as you have, great feedback through email and a couple of nice questions as well that people have posed to you. I’m wondering if you would be willing on a future installment of this to answer some of those viewer questions.

RR: In fact, Albert, I was going to ask you the same thing. I’m getting hundreds of questions and we need to develop one or more of these social media formats so that we can answer the questions. The idea that you and I know everything that’s on our customers’ and viewers’ minds probably isn’t accurate and the truth is that there are literally thousands of nice, smart people out there viewing these videos. I saw the other day that the silver video had been viewed now by 30,000 people, and so I would welcome the opportunity to broaden the discussion.

AL: Please, if you’re watching this video send questions to [email protected] and we’ll do our best to get as many of those answered by Rick as possible. Thank you very much, Rick. It’s always a pleasure. Thank you for indulging my personal curiosity and I think helping out a lot of viewers at the same time. So, thank you.

RR: Albert, let’s do more of these. I miss spending time with you in the office, personally, so let’s do it virtually and continue to amuse each other and, hopefully, our audience.