The US Manufacturing and Electrification Megatrends Are Here and They’re Way More Than AI | Chris Semenuk

The US manufacturing has essentially been in a recession for three straight years. And we have only just emerged now. The ISMP and I survey just reached above 50 in the last three months. And that's after three consecutive years of sub-50. It's the longest construction period in the survey, three straight years. And we are only three to four months into a recovery. While everyone is trying to chase hyper-scale or semi-conduct companies, there is an enormous investment opportunity happening right now underneath everyone's nose that involves just basic US industrial champions that are businesses that have essentially been off their radar for in some cases five to ten years. Hello and welcome to other people's money. I'm Max Weathy and I'm joined today by Chris Seminock. He's an investment partner at TMA ETFs where he manages two funds, one focus on manufacturing and reshoring, RSHO, and the other focused on electrification, VOLT, VOLT, both have performed very well compared to the market since their inception. And you're today Chris, thank you for joining me today. Hi Max, thanks for having me on. Manufacturing, reshoring, electrification. I might argue that they're tied to a broader trend of rein industrialization. We could argue about whether we're reindustrializing or this is a new wave of industrialization that's very different than the industrialization that this country had before. I'm sure we're going to get into those nitty gritty details. But I want to just start out with a question more broadly about this is something that we've been hearing about from multiple administrations. It broadly has bipartisan support that we should be reindustrializing here in the United States and whether it was the CHIPs Act with Biden or a tear of policy from President Trump. It's clearly being pushed at the highest levels of government. My question is to what extent is it a reality? I get that question all the time. I think reindustrialization or deglobalization, in terms of a world scale, are both extremely real. And where do you see that most? Just look at the unprecedented size of backlogs within close-hold multi-industrial businesses, whether that's GE, GE, Vernova, companies like Caterpillar. I mean, we're looking at backlogs here that have historically never been recorded. Backlog at Caterpillar is north of $60 billion. The backlog at Vernova is north of almost $90 billion. So the notion that this is some fantasy that we don't really see this on the ground is frankly nonsense. And the backlogs of these businesses, whether they're large caps, like the ones I mentioned or even smaller caps or medium caps, we have seen unprecedented order backlogs for businesses that extend out to two to three years in length. And the other place that an investor or an audience member can look at is simply industrial production. Actually, yesterday or the day before yesterday, we got the April industrial production number. And that was, I think, 1.7%, which a lot of people, I think, have kind of said, wow, that's not a big number. Frankly speaking, that's a huge number because we have seen almost three to four decades of stagnation and industrial production here in the US. So what's important, I think, from an investor standpoint of you is not to look at the absolute figure, but look at the rate of change of that number. So it's real. It's look at the backlogs. We're building production capacity here in the US. We are unprecedented highs in terms of non-residential construction. The numbers are real. They're out there. They're in the order backlogs of multi-industrial companies here in the US that people are familiar with. These businesses have revenue. They have earnings. They have cash flow. These are not lost making companies. So yeah, sorry, that's a long-winded answer to your question. But I think this idea that it's, you know, look, in terms of reindustrialization, I think it was much more in the headlines two years ago. I think it has left the headlines and we can talk about those reasons why. But I think underneath the radar, the investment opportunity with regard to reindustrializing the US is still in its very early stages. People have an idea of it in their head, right? Where all the jobs that went overseas are going to come back and we're going to be making the same things. Manufacturing is going to look the exact same. And that's not how it's going to work out. That's not how it's working out right now. And so my question would be, what is the reindustrialization image that people have in their head and how does the reality differ this time around? That's a great question. Look, we industrializing or we building the US industrial capacity and make things, if you will, is not about taking a factory out of China or out of China, or out of Bangladesh and moving it to Louisiana. That's not what's going on here. What's going on here is that the US is the epicenter for incremental dollar being spent capital investment. So it's about when a company faces the decision to expand a footprint for production abroad or whether we have the ability to do it here in the US, the US is the first choice for incremental capital investment being done around the world. By US companies and by foreign companies, are the US global share of foreign direct investment. I'm not going to throw that many statistics out here, but the US share of foreign direct investment is showing that. It's upwards of, it's north of 20%. And if you look back over the last couple of decades, US share of global FDI has been anywhere from sort of 10 to 15. So the magnitude of that number is enormous. So again, I think there is this perception that, oh, we're still waiting to see all these factories come from Asia back to the US. That's not happening, but what is happening, as I said, is that every time a COO sits down in his office or in front of the border with his chief executive, and says, we're going to do a factory expansion. Where are we going to do it? It's here. It's here because if you want to sell in the largest and most homogeneous market in the world, you have to make it here. You can no longer make it somewhere else and ship it into the US. That business model used to work over the last two and a half decades and that's what happened and that's what got the US into this condition where its industrial footprint is in tatters. That's over. In no administration, regardless of what side of the island we're on, we are not going back to a world where we're going to go back to globalization. The train is left to station. So my question from that would be, why has the train left to station? There's so many factors you hear people talk about the energy advantage of production here in the US. You hear people talk about, there's a push in a pull, right? Obviously the the tear of policy has since been reversed but that's clearly a policy that is meant to make it more palatable, more economical to do business here versus overseas and then at the same time you have the supply chain shocks that we have seen over the past few years, some of them self-induced, others thrust upon us by COVID. And so my question would be for those COOs who are saying our marginal dollar on CAPEX should be spent here in the US, what is the driving force? There are multiple drivers. I mean, policy was one, but what the government is essentially doing is crowding in US manufacturing. So the government is saying, we're going to write big checks, we're going to help you, we're going to incentivize you to build here. Now that started with really the firing gun for that force was Jake Sullivan, who was Biden's, I think he was a security advisor. Basically, the US, Sullivan made a presentation once and said the US needs to become more self-sufficient with regard to strategically important industries, whether it's defense, energy, semiconductors. And that recognition by the administration to the financially support that effort to make the US more self-sufficient with regard to these strategic industries has since leaked down into the private sector. The new administration, the Trump administration, has essentially embraced that same-- but also that same sort of strategy, but it has rather than making here an option. And making here is now, frankly, under the Trump administration, amending. So Biden wrote checks. Trump is using tariffs. I mean, the Biden administration essentially continued all the Trump tariffs from Trump one point out. So as I said, I don't think we'll see a future president run on any platform that involves, let's go back to shipping, manufacturing abroad. And now let's just get on to the other aspect. Let's just say we don't have the government there, and they're not telling us to make here. Well, and we don't have tariffs. The fact is that U.S. companies now that I speak to on a regular basis have found that it's now very cost effective to make things closer to where you sell them. So we can all talk it into accounting and say, you know, there's low or working capital. But at one point, if you flash back to the year 2000 when China entered WTO, which was really the beginning of the U.S. letting its industrial infrastructure degrade, if we go back then, you've got this point where now that's, I think, people recognize that. But companies, you know, labor costs in China were 30, 40, X, 20 years ago. They've now, you know, labor costs in China, you know, what they're paid per hour for manufacturing have gone up markedly. To a point where they're not where the U.S. is, but getting closer to where U.S. manufacturing is dollars per hour. And what a lot of investors need to realize, it's not just about cost of making the good. You also have to transport. So what's gone up in the meantime, fuel prices have gone up. The cost of intellectual property, protecting intellectual property that is 7,000 miles away. The cost of if you make something in a red color and it turns out when you're selling it here in the U.S., people want blue, the cost of retooling a factory 7,000 miles away versus right down the street is much more expensive. So, you know, this cost of customer service is a lot cheaper if you can do it closer to where you sell the items. So all these kind of intangible components to the cost that's total, you know, the TCO, that's a total cost of making something is not just labor, but it's transportation, it's protecting IP, it's doing customer service, it's lower, lower working capital costs. So when you put it all together, making here in the U.S., now makes a lot more sense than it did 20 years ago. To what extent is it also a different mix of goods? It's more advanced manufacturing, right? Textile work is probably not coming home or but the advanced manufacturing that we're talking about is it's a completely different mix of goods that are being manufactured here. To what extent is that true? That's true. So when an investor looks at this opportunity, they don't, you, one shouldn't think of it as, oh, we're going to start making more steel and we're going to make a lot more chemicals and a lot more clothing here. That's not happening. And what's, what is happening and you can see it in the numbers. Again, this is not just Chris Seminock telling you this. This is in the census numbers in the St. Louis Fed numbers for April's industrial production. Things like the largest growth in industrial production in April were communications equipment, electrical equipment, semiconductors, even chemicals and utility equipment. So this is where the U.S. excels and where we have some of the, well, we have some of the global champions in terms of, in terms of utilities, electrical, semiconductor companies. And yes, I don't think and I agree with the notion that we're not going to bring all this, what I call a commodity centric equipment back to the U.S. from lower cost parts of the world. And before you ask it and I know it's coming, someone's going to say, yeah, but where are all the manufacturing jobs? So we lost 7 million manufacturing jobs over the last 15 years. I don't see manufacturing jobs coming back. News slash guys, that's not coming back. Okay, but what is coming back is manufacturing. What is coming back is industrial production. It's, you know, it's there in the numbers. And the way we're going to get there, we being the U.S. is through automation and through equipment that improves efficiency. The investment opportunity isn't in infrastructure, roads, tunnels. That was kind of reindustrialization a few chapters ago. But where we are now is we've built facilities, we've built production centers and you see that. And I think over the next few years, those factories will be kitted out and equipment will be put into those factories. And a lot of that equipment will be whether it's, you know, companies that are benefiting like Rockwell, Emerson, machine vision, like cogniz. All these companies that make, if you go inside a factory like I do every month when I visit our companies, if you go and look inside what the equipment is, anything that's automation and efficiency related, that's where the investment opportunity is because no, we are not going to get 7 million jobs that we've lost due to globalization back again. So you brought up a couple of sectors that I would say are deeply tied in with the AI CapEx spend. And so my question would be to what extent are these themes linked? How much of the industrial production growth that we're seeing right now can you draw a direct line to semiconductors, AI data center buildouts versus not that that isn't secular and sustainable, but to other trends that might not have that AI CapEx risk. Yeah, I've got it. I just drives me nuts because, you know, there is this notion out there and I see it every day and my incomeings are all about space and AI. Look, the reindustrialization, investment opportunity is built on just again, I mean, just to answer your question directly, AI currently is 6, 7% of power consumption here in the US, of electrical consumption. Manufacturing is 26% of electricity consumption here in the US. So yeah, AI is important, but it's still small. Is it growing quickly? Yes, but the real driver of power consumption here in the US and then the sort of segues into the adjacency of electrification is manufacturing. And, you know, it's the driver. AI is important. It's in the headlines every day, but it's still very small. I want to shift a little bit here to finding the winners, right? It's great to recognize these economic trends, but the end of the day we're in the business of investing and the question is, who's going to benefit? How do you keep track of this flowing through to companies, you know, top and bottom lines? I characterize the investment opportunity this way, which is if we go back five years or so, the opportunity was we're building more roads, building more bridges and infrastructure was kind of stage one. And now, as I said, we're entering a different stage and that different stage is, you know, we built all these big things and structures and we built the outside walls of factories, if you will, to oversimplify it. But as I said, now we're going to put things inside these factories. And in many cases, we haven't, you know, the US, it hasn't started producing things yet. We've built the facilities to produce. And as we start to fill out those factories, I think the biggest investment opportunities, as it said, the single largest investment opportunities will be an equipment. So any type of equipment that is used to make stuff and whether it be fasteners made by fast and all, pneumatics made by Parker Hanneson, Ingersoll ran, that makes anything that goes, anything that gets moved in a factory is moved via a ball bearing, it's moved by fluid, I.e. pneumatics, it's either vacuum or pumped. That's stuff that Ingersoll makes, Parker Hanneson makes, fast and all. These businesses that I'd mentioned are some of the most well-managed companies will stop the end in the country, in the world, for that matter. And what I think investors need to realize is that the reindustrialization investment opportunity here is both, um, think-look-al. It is, I'm not saying that Cyclestone exists anymore, I think they do. But I think we also have a secular driver here that we didn't have 10 years ago. And the secular driver is what I've just mentioned, which is I think that the US now has entered a stage where, where, you know, either through, you know, having the option to make here, from being financially supported by the Biden administration or through the Trump administration, which is basically just hit people over the head and said, "You have to make it." things here. We've had, you know, this is industrial stocks are now confronted with secular cyclical. The cyclical part is only is only emerged in the last three months. I mean, if you look at the sort of everyone's gold standard gauge of, you know, obmanufacturing is the ISM purchasing manner survey, which I'm sure all your audience knows, but the ISM PMI survey just reached above 50 for the last, you know, in the last three months. And that's after three consecutive years of sub-50s. What is sub-50 means? The score sub-50 is contraction. It's the longest contraction that the US manufacturing sector has had as experienced in the record of the entire survey. It's the longest contraction period in the survey, three straight years. And we are only three to four months into, into into a recovery. And I've spoken to a number of businesses in the last three weeks before the quarter closes and demand is still shaping up well. So inside the factory walls, any company that makes anything to do with automation, ball bearings, pumps, pneumatics, all of these kind of called in like really rudimentary products that help businesses manufacture things more efficiently. And that's where that's where I as an investor who manages, you know, our US manufacturer, we're sure and funded. That's where I'm looking and that's where that's where I'm invested. Even, you know, even caterpillar, just to take that name again, I mean caterpillar is essentially three businesses under one roof. It's it's it's construction equipment, all the yellow equipment that everyone sees out there. It's resource industries, which is all the equipment they make from mines and its power and energy, which is, which is their generator business. So over the last four years, the resource industries and construction equipment has essentially not grown. And what caterpillar has survived on is demand for its power, for its energy, you know, for its reciprocating engines, it's in for its gas turbines, which are being used for backup, of course, now being used for primary power as well. But that business last quarter, you've seen all three divisions grow. You saw construction industries grow, the all the yellow equipment. You saw resource industries have an order backlog growth that it hasn't seen since 2012. And the power energy business continues to rock and roll. So all three cylinders within caterpillar are now are now working. And, and so again, you know, these companies are these are these are businesses that as I said, the cycle's there. I think what we're going to be confronted with is a much more much more protected cycle now. And that's as I said, going to be supported by this secular demand driver for industrial businesses in the US as I said, to to to make more things here. And as I said, the US is the epicenter for incremental capital for the in-demand dollar capital being spent. It makes me think about sequencing, right? So you said the infrastructure, the sort of pure infrastructure, that was it, that was an earlier phase. Now we're talking about manufacturing equipment. And I guess my question would be, is there how do you think about the way that this is going to go over time? And is there a point in time when the people who are the buyers of this equipment who are then manufacturing the the more end of the line goods become the players as they reap the benefits of the efficiencies of these machines? And investors just are not aware of that. And, and we have only just emerged now. You know, we are now seeing caterpillar talk about the acceleration of order books for construction equipment. We have seen some of the largest distributors of of equipment factory equipment here in the US start to talk about order growth companies like gates, which makes belts and chains and drives that go inside of factory. They have started to say that as the year has started, we are starting to see a pickup in orders after three and a half years of stagnation. And so the cycle is really put the infrastructure in place first, because we can't move goods around the country unless we actually have an infrastructure that can get them from point A to point B. That's done. So, infrastructure is over. If you look at the IIA, like 70% of the IIA, which was Biden's big, you know, open-check book to basically subsidize large infrastructure projects, 70% of that has been committed. So, not saying it's done entirely, but that's largely done. What's happened now is that we've started to build more factories. We see that in the non-residential construction numbers, which are continue to kind of operate at all-time highs, the structures are off. And now, you know, in some cases, still being built. And now we're getting to a point where, as I said, those structures are going to be filled with equipment. And that equipment, as I said, is everything from, is all this, call it, say this way, the real investment up between now, where we are in short cycles. So, all of these sort of ball bearings, all lubrication systems, all this kind of really, call it unexciting, rudimentary products that create that people don't really think much about. But frankly speaking, like filters, filters that go into anything around a factory requires a filter because liquid needs to be filtered, air needs to be filtered, gas needs to be filtered. You know, Parker Hannathon is just recently made an acquisition of filtration group. It's now the largest filter maker in the world. I don't know if anyone has gone into a home depot or a loaase and taken a look at like filters that you buy through your air conditioning system, but they're way next to nothing. They look like a piece of paper and they charge you like 40 bucks for those things. So, the margin on industrial filters is essentially a license to print money. So, you know, I'm trying to put that example out there because these are critical components to the inner workings of a factory and these critical components are very high margin products where US companies like Parker, like Fassinall, you know, have, have like anger soul, have very time where our global leaders in these products. And again, these are products, these are companies that as I said, you know, these are products that have revenue, have earnings, have cash flow, have great management, they buy their stock back, they even have dividend. So, again, point is out there that, you know, while everyone is trying to chase, you know, hyperscalers, semiconductor companies, space companies, there is an enormous investment opportunity happening right now underneath everyone's nose that involves just basic US industrial campaigns that are businesses that have essentially been off their radar for, for, in some cases, five to ten years. And so, again, I kind of like zoom out here, you know, what's happened over the last four years in the industrial manufacturing space in the US is that there have been some very large headwinds and it started as we emerged out of COVID, we had supply chain shock, right, where there just wasn't enough of things. So, when companies ordered, if they needed a hundred, the purchasing manager ordered a thousand because he thought they, or she thought they would get cut back. So, the trouble is that the US supply chain adapted much more quickly than people expected it to. So, this purchasing manager who ordered a thousand items, thinking they got a hundred walked into work one day, looked at the loading platform, and saw a thousand on the platform and said, "Oh, you crap." And so, what does that mean? What does that mean is that you don't reorder right away. It means that you have to work off those thousand items that you overordered for. And that sort of, that, that, that, that issue really plagued US manufacturing for the last 36 months. And that's, that's called destocking. So, so the supply chain shortage morphed into over-supply for mostly a lot of short cycle things like bearings, fasteners, pumps, pneumatics. And there was a lot of that sitting on the shelf. That had to get worked off over, and that took essentially three years to work down those, those high inventories. We're done with that now. I've spoken to a number of companies in the US manufacturing space. I've spoken to all the largest manufacturing distributors. So, you know, if you're not caterpillar, or you're not GM, and you're a manufacturer, you generally don't order all your inside factory stuff from the maker of the factory stuff. You order it from a distributor. So, you order bearings from, there are a couple of very large factory equipment distributors in the US. We own one of them, called the applied industrial tech. And those, that reordering just essentially never happened. And it finally, the destocking came to an end this year. Now, later on top of that, what were some of the other issues that the manufacturing sector had over the last couple of years? higher for longer interest rates. So if you're a CO, CFO, COO, and you're about to green light a project, and you have no sense of what interest rates are gonna do going forward because they're continue to creep higher. You're generally gonna not green light a project, you're gonna wait. So rates have been higher for longer. That has cast a fog over the industrial space. Destocking has cast a fog over the industrial space. The big elephant in the room is tariffs. So throughout basically the last two years, Trump tariffs have essentially changed on a monthly basis. So if you're a COO of a manufacturing business about to launch a new project, you're head and spinning because every day tariffs changed. What did that mean? It meant you just delayed your decision to expand your or build your new factory here in the US. So, but what's happened over the last six months is that tariffs are still here. I mean, they haven't gone away, and we can talk about that, but most companies understand how to manage tariffs now. And what does that mean? Here's what it means. It means we absorb some of the pricing increases that tariffs cause, and you and I absorb the other pricing increase that tariffs cause. So manufacturers have absorbed it, and they've put through pricing increases over the last year and a half. So tariffs, I think, are no longer, and at least with companies that I speak to, they don't really mention tariffs anymore as being this sort of bogey out there that is preventing them from doing anything. So as I said, we can talk about interest rates where they're going, are they gonna go substantially higher? We can, I don't think so. And I think longer term, as long as we have the current president that we do, I think there's gonna be a general desire to see rates go lower. So we have lower rates, tariffs are more manageable. Destocking is over. And these are, these have been big, big kind of impediments to the manufacturing sector over the last three years. And we're now kind of just emerging out of that fog, and we see it in the first quarter numbers. We see order books starting to pick up for all short cycle equipment. And that's where all this equipment that factories use to make things, that's the investment opportunity. And that's where, that's where the fun, at least that I'm managing, that's what I'm focused on going for for our investors. - Well, it's interesting you talk about this, this manufacturing recession, but at the same time, the performance of the fund kept up broadly speaking with the market over that period. So these companies were still performing well compared to the investable universe that most people are looking at. And in the last six months, we've seen the acceleration. So what you're talking about from a fundamental and economic perspective is playing out clearly in the price, but they have maintained strength during that period. So what can you attribute the strength to? Obviously, you have to pick up in the order books now, but in that period where you said things weren't as rosy, why were these companies able to generate returns for investors? If you're a manufacturer, the closer you were or are to large projects over the last three years, the better your business has been. So as I said, all these infrastructure projects, the closer you were to those type of projects as a supplier, the better your business was. If you weren't close, if you were a smaller medium-sized company, for example, generally large projects have managers on them who like to do business with large suppliers, whether it's a construction company, whether it's providing electrical equipment, they're not going to small, medium-sized industrial businesses to support multi-billion dollar factories or multi-billion dollar highways, et cetera. They're going to large, large-count businesses. Now, what I think you have to be careful with when you look at a performance of stocks over the last few years, is that the one, the one single part of the industrial space that has worked well is aerospace and defense. And if you look at the XLI, for example, if you look at a passive index of industrial stocks, the XLI is full of aerospace and defense companies. The aerospace and defense industry has grown by leaps and bounds for the last five years and is still growing. The issue with aerospace and defense stocks within the industrial space as a whole, aerospace and defense companies are enormously expensive on valuation. So this idea, as for example, Parker has a portion of his business at aerospace and defense, but it's only 30%. Eton has, which is the largest maker of electrical equipment in the world, medium and low voltage, has a portion of his business, which is aerospace and defense. But again, it's under 30%. So some of these businesses, industrial businesses that have exposure to number one, large projects and number two, aerospace and defense, have done well. But I'm saying that's not where the opportunity is for an investor. The opportunity is to, if the basically avoid those, and that's when our fund I'm doing is I'm saying, look, aerospace and defense stocks, they are trading at all time high valuations. EPC companies, so engineering and procurement companies called them industrial construction companies, like Flue or Primoris, there's a whole cottage industry of construction companies listed in the US. They have generally been licenses to lose money, but given the demand for industrial construction over the last few years, these stocks have all made all time highs. They have never been higher in terms of valuation and they have terrible track records creating shareholder value, but they've been in the right place at the right time. So the valuations within the industrial space, the barrel space and defense stocks and construction stocks, those stocks have performed well, but have what I think are overvalued in terms of, in terms of their multiples based on their future earnings potential. And you have this whole cater of other businesses that have essentially been left behind over the last three to five years. And as I said, that's within the factory walls. And these are shorter cycles. So the short cycle parts of the industrial space, these are stocks that are lower in terms of multiple and are also trapping in terms of their earnings. So what is that? That's, as Trump would say, that's a beautiful thing. It's to an investor. If you can buy trough earnings on a trough multiple, show me that every day. And that's where we've positioned, that's where I positioned our US manufacturing. And let's talk about multiples a little bit. What are the multiples you like to use for industrials? And as you said, these are still cyclical businesses, oftentimes with cyclical businesses, they look the most expensive when they're cheap and they look the cheapest when they're expensive. And so I wonder how you think about the sector through that lens. I'll answer that question first with our, you manufacturing stocks in second with electrical. So manufacturing one cannot look at fiscal year, one or fiscal year two EPS numbers and construct evaluation off of that because we are operating in most short cycle businesses, businesses, you know, haven't grown earnings for the last few years. So you have to basically do the homework. And that's why that's what I'm here to do is I'm here to look at these companies and say what is the earnings potential of this business if this sort of cycle starts to recover again, now that destocking is over, now that interest rates are probably going lower, now that tariffs are kind of out of the way, we haven't even talked about the big beautiful bill, but that's also going to kick in as a positive. So my view is to sit here and say, what is the earnings power of a ball bearing company like Timkin three, four years down the road? And that's what the investment community isn't doing right now because when you ask anybody on the sell side or even on the buy side, and you'll talk about a ball bearing company, they don't even want to talk to you because they're like, yeah, now that's boring, well, the industry hasn't grown in the last few years. Well, news flash guys, like their order books have just started to recover in the last couple of quarters. And these are cheap stocks, and these are companies that have really strong balance sheets. And what have they done over the last three to four years? The businesses that haven't had revenue growth and have had order stagnation, what they've done has gone back through their businesses and focused on efficiency and cut costs and reduced footprint of their production facilities. So these companies, shorts like businesses are emerging leaner and meaner than when they kind of went in through this destocking and high interest rate period and have confronted with all these sort of macro headwinds like tariffs, they have used the last few years to get more efficient. And I think when you start layering in a revenue growth, incremental positive revenue, and has orders pick up and they have in the last three or four months, I think these shorts like businesses are poised to actually over earn because they have cost faces which they've worked on over the last few years. I mean Gates is, you know, Gates and the symbols GTS, it's a poster child for this, but what I've just outlined, Gates has reduced from manufacturing footprint. They've cut skews. Timkin has done the same thing. Like these businesses are lean and mean now and ready to exploit a pick up and sales. And yeah, these are investment opportunities out there. I also will look at DCF. So, again, when you look at a short cycle business, don't look at near-term earnings, because near-term earnings are a reflection. It's a bias of investors what they've gone through over the last few years, which is this period of, as I've talked about, which is, they've had some real headwinds that are now passed us. So, you have to build an earnings model that involves not thinking about, okay, what did this company look like last? Like, a lot of these businesses over the last five years in the industrial space in short cycle are very different now than they were five years ago, in our leaner and leaner. And so, you have to kind of, what I do, is I look at actually what I think the earnings can be going forward. I don't invest on consensus. I mean, that's just, you know, consensus is nonsense. I mean, if you're gonna pay someone an active fee to manage your investments, okay? And they talk to you about, they're using consensus, fire them, okay? You pay an active manager to build an earnings case that is something that is unique to what they view as an investment, and that's what I do. But we also try and relate things with simple DCFs. We use price to cash flow, we use historical, P-relative. I'm not, you know, I'm not a single-lens person when it terms to valuation because, you know, over my 25 years of being in this gig of a fun manager, I've learned that there's more than one way to scheme a cat in terms of how to value a stock. And, you know, generally, if you use one approach, yeah, you're gonna miss things. - Well, it sounds to me like it is that classical scenario where if you are using trailing valuations and you're just extrapolating that the sales and earnings are gonna be the same, they look expensive. But what you're saying is that we are entering this period where expensive becomes cheap because you're entering an inflection point in sales and earnings. - Yes, for sure. I mean, you know, we, and I think that's where the street, and oh, and, you know, there are some excellent analysts on the street don't take those messages the wrong way. But, you know, the people on the street and I think just investors at large, even on the buy side, you know, have just essentially been trained to focus on, you know, the big growth numbers, whether it's, you know, hyperscale stocks, AI, all the current like themes that are essentially in the headlines every day or space. And, and the real, and again, the real investment opportunity here, there's another one. And again, as I said, it is in kind of, you know, nuts and bolts type manufacturing equipment businesses and people think, yeah, that's kind of boring stuff. But I mean, look, I mean, year to date, there have been multi-empted, there are multi-empted those real stocks and, I don't know if we can mention names here, but like there are several stocks that are up 30, 40, 50% just this year, okay? I mean, Parker Hanuffin, which, you know, GE used to be, I think, kind of seen as the gold standard for manufacturing champions in the world. Parker Hanuffin has probably taken their place. I mean, Parker, that stock is tripled over the last, I think, three, four years. So, and you still think it's cheap. I still think Parker's cheap, they have a whole new business, as I said, they bought filtration group, which I don't think they closed on it yet, but I think they are about to. And when, and when the company has an opportunity to talk about this new leg of their business, which is industrial filters, as it's making and selling industrial filters is essentially a license to print one. And it's, again, one of those interests you don't think much about, but every industrial or manufacturing process requires using a filter, because you can't use dirty air, you can't use dirty oil, dirty water, all that stuff needs filtering. The US's entering is entering and, you know, a manufacturing renaissance. And I, you know, I hate to use that word, but it is. I mean, this whole notion of ingenuity is emerging here in the US. I mean, honestly, you know, I mean, I kind of resisted, but the whole SpaceX mentioned, I mean, SpaceX is some ways an adjacent sort of to this US ingenuity thing. And that sort of mindset is growing here. And the US is where, again, if you are a foreign company, you have to make here. So companies like ABB, like large industrial electrification businesses, everything ABB spells in the US is made here, you know, whether it's in Wisconsin, they've invested $5 billion in the US over the last few years. So you have to make it here. You know, tariffs have not gone away. You know, the IEPs were declared invalid by Supreme Court, but the current administration has, you know, they still have the 232s, they still put in the 122s and there's the 338s. And, you know, that's a whole nother, you know, episode. But, you know, tariffs, what are tariffs? Like tariffs, what tariffs have done has literally driven incremental capital investment back to the US. That's what it's done. Why? Because essentially what a tariffs do, they make prices higher, because that's how companies deal with tariffs. They just increase prices and they absorb some of the costs, which is what manufacturing companies have also done. Higher, if you're a manufacturer of something, where do you want to sell in the part of the world where prices are high? If the US is essentially that place right now, because tariffs have made prices higher, the only way to access that market of high prices to sell your stuff is to make it right beer, I'm sure. So, you know, this, as I said, me industrialization has sort of left the headlines and manufacturing has left the headlines because of high rates, because of destocking, because of tariffs. But those headwinds have now moved past us. And some investors are recognizing that. And electrification is the same issue. I mean, both manufacturing and power, they're both investment opportunities that have surfaced because the US has neglected number one, it's manufacturing footprint over the last 20 years. And when did that start? That started when China entered WTO. That's basically the firing gun. So when China came into WTO, basically all US manufacturing went offshore. That's stopped. It's never going back to that again. In terms of electrification, we've had two and a half decades of no demand for power. Okay, so we haven't built new transmission. We haven't built new distribution. We haven't built new generation. We've had just no reason to invest in our electrical infrastructure. And all of a sudden, we wake up one day, and we have manufacturing. Like I said, it's 26% of power consumption. We have these new things called data centers. We have transportation, which I still think will electrify. And we have electrification of everything. So what is electrification of everything? It's the sort of catch off for, it's about to get really hot this summer. You're going to turn on your HVAC a lot more. You're going to, we all just use more electrification for everything. So these electrification isn't a data center story. And that's so frustrating. It's just an overall wave of demand for power. It's just like in the US, we have an overall wave of capital investment into factories and industrial production. Because we haven't built anything for the last two to three decades. And so this sort of neglect of our industrial and then the neglect of our power footprint, that's where the investment opportunity is here. And you don't need to buy, you know, lost making businesses as an investor to get really strong returns from either one of these. I mean, in the industrial sector, these are, you know, gates, ingress all Parker, you know, cap. These are extraordinarily well-managed businesses. That have enormous cash flow. You know, same thing in electrification. You don't need to go out and buy, lost making nuclear companies. You can just go out and buy, you know, they make everything from the grid straight down to the chip inside the data center. Like that's like they're one stop shop or anything electrification. Like these are real businesses that are here today with great management, great cash flow, great earnings. And as an investor, yeah, as I said, you don't need to go out and find, you know, the new, new thing. Like what's the new, I mean, get that all the time. Like what's the new eating? What's the next vernova? The next vernova is vernova. Okay. And the new eating, what's after eating? Well, eating because these larger companies are going to continue to dominate the space. And I'm not saying that there aren't small and medium cap businesses in here that that investor can, there are in, in I own some of them. You know, and they're very unique. But again, as I said, I'm only mentioning this because you don't, you know, you can get very solid returns as an investor and not have to take massive risk to take advantage of both of these trends. Yeah, you know, investors have been constantly searching for bottlenecks, right? What's the next bottleneck stock in these, in these supply chain buildouts and, and a lot of times, the commentary is moving down and down the market cap level. into higher risk companies. Some of them might have profits, recent profits, some of them are completely unprofitable. Some of them are even pre-revenue. And so you're saying you don't need to go there to get exposure to this electrification theme. - No, no, no. - Let's shift our focus to that electrification theme. And you said it's not just data centers. And a lot of people have talked about the lack of investment in the grid. This, to me, seems much more like the revitalization. - And just before you leave the re-industrialization, I mean, I didn't get a chance to talk about the whole humanoid thing. I know, again, I'm out there seeing companies every day. You know, the whole humanoid thing is coming. Like in a couple of years time, it's coming, okay? And all the things that humanoids, you know, robots, all this, you know, every day we talk about, we don't have enough manufacturing jobs. And yeah, we don't. And all of that's going to be, so how do you address the fact that we don't have a manufacturing job? That's, you know, that's through automation and through, you know, equipment, efficiency, equipment that helps you increase efficiency. So the whole humanoid thing is early, but when I speak to companies that are in the supply chain, they say it's going to come a lot sooner than people think it is. And, you know, think things like microbearing, micromotors, actuators, like all the things that make a robot articulate, like there's an enormous supply chain out there. And there are some really big companies that don't talk about it, but are currently supplying into the humanoid opportunity as well. And I mean, it's about like things like Timkin, they make all the actuators that go into robots. Like anything that articulates a hand, a foot, a leg, anything like that, all needs an actuator. And there are very few companies in the US that make actuators in the world, frankly. You know, and-- Again, you're saying you don't need to own a recently desbacked, sub-billion dollar company with a couple of-- No, we wouldn't wait for the trucks. And I will answer your question about electrification, but this whole thing about like the reindustrialization, I think it's real short-script. And, you know, what is one of the biggest ways to play the whole-- to invest in the whole humanoid space? There's a company called Terrix. What does Terrix do? They make garbage trucks. They make rock crushing equipment. They make all the lift trucks that utility companies use to work on power lines. And they also own the Genie brand. So all those lifts that are used inside Mount Side Factory. So what is Terrix also the largest investor in apptronic? Applet's apptronic. It's the biggest kind of like skunk works for development of humanoid. So they're one of the largest investors who also became a largest investor in apptronic, Google did. So, you know, there are a lot of ways to kind of invest in these sort of, you know, OK, fine. Let's talk about AI. I really don't want to. But how does AI work? It needs physical. There needs to be a physical component for AI to work in a production process. So what does that mean? That means, as I said, any automation, it means things like machine vision, which is cognac. So AI needs a physical layer. And the physical layer are all this stuff that is used in the manufacturing process. Call it, yeah, it's physical AI product, you know, equipment. And so that's another big place. It's another investment opportunity that investors look at. And as I said, there are some really unusual places to find that. And Terrix is one of them. Timkin is one of them. They make the whole supply chain for humanoid. That's coming. As I said, manufacturing jobs look, I mean, I live in a part of the country where, you know, every spring people put the sign on their front lawn that says, you know, Jimmy or Sal, it just, you know, is just graduated from high school when it's going on to, you know, Harvard and Yale. Nobody puts a sign in their front yard saying, my son's going to go on to work on a factory line or become an electrical utility line worker. OK, we're not getting those jobs back. All the 7 million jobs, that's not going to come back. And that's not where an investor should look to find validation for reindustrialization, where you look to find a validation reindustrialization is simply, you know, the fact that we are, we've made more infrastructure. We've made more factories in an hour about to fit them out. Now, moving on to electrification, stay in issue. I mean, the US has neglected its power generating and its transmission distribution footprint for over three decades. Why? I mean, frankly speaking, and I speak to all the electrical equipment in all the utility companies, it's just bad management. I mean, utility companies have neglected their infrastructure. And now we're seeing enormous amounts of money pour into, pour into, you know, utility equipment around the country. And, and, you know, that equipment, you know, is, again, we just don't have, it's, you can't make it fast enough. And that, you know, the demand for power, which has been zero to minus one for the last two and a half decades, is now anywhere from two to four, I've seen numbers from the energy information agency that are saying that the number could be, you know, three to five going forward. So we've had this massive inflection from nothing to call it tripling. I know that we talk about numbers like two, three, four, five percent, it doesn't sound like much, but when it hasn't grown for the last couple of decades, that ends up being a pretty big number. So that demand for power, as I said, is not a data center. It is a data center thing, but it's not singularly a data center thing. Manufacturing is triple or almost four X, the size of power consumption that data centers currently use in the US. Transportation, we can talk about like, you know, what, I own a, you know, I own a 2000 and eight Corvette. So I'm a big fan of, you know, combustion engines. But transportation is going to go all electrical. It will. And, and as I said, IoT, these are drivers out there of electrification. It's not just a data center. And I, you know, the issue with electrification is we can order all the turbines from Vernova and Zemens and hitchhiking. Order all the turbines that we want. And we can get caterpillar to put all the reciprocating engines and CCGT turbines, you know, on utility campuses or behind the meter, which is the whole idea where companies who need power now don't go on grid. They're just going to put generators in the parking lot. You know, all of that, all of that demand out there, once it finally comes online, and not be supported by the current electrical grid that we have here in the US. So you think behind the meter is not enough to make up for the burden we're going to have on the grid. So, so behind the meter was like the cool kid on the block for like the last 12 months. And that's all people want to talk about. I kind of thought it was interesting and I was sort of putting one foot in the boat and thinking it was, but in the last sort of four to five months, I think behind the meter's nonsense. I actually think, and this is after speaking to the hyperscalers, I just got done, you know, I was just out of the EI conference to let Edison Electric Institute is basically like the US utility industries think tank and they do a conference over the years. It's like the high school prom for utility management. I'll get together once a year and, you know, anyway. So, but I go to that conference and I speak to management's behind the meter, you know, what does that mean? Behind the meter means that if you need power and you need to sit today, you call the utility company, they said, okay, fine, we understand you're on the list, we'll connect you in seven years. So you're like, oh, okay, I need power sooner than that guys. I can't wait seven years to get on the grid. So what do you do? You call up, you know, you call up, Vernova. And Vernova says, okay, we put in order for a turbine, you know, we want to see, we want to see that you have it permitted, we want to see that you have an installer and by the way, we want 25% down payment and you're like, okay, fine, I'll comply. Oh, by the way, you put in the order today, we'll give it to you sometime in 2031. So, okay, you can't get power there. So now what do you do? You go to someone like Caterpillar and say, guys, I know you make large ends for extraction equipment, but you also make power engines that can sit, you know, on a platform and generate power, whether it's a reciprocating engine that is fueled by, you know, gas or whether it's a CCGT, which is combined cycle, which is a turbine that essentially it's like an aircraft engine. So you go to Caterpillar and they say, okay, you know, we'll give that to you. You put that on your site, you power your factory. The trouble is, what if that goes down? You need another backup to you to that. So what the trouble is, is that the cheapest way for a company, a large load, and large load is sort of like the buzzword for a data center or a factory, the cheapest way for a factory or data center to get power is to connect to the grid. And the most expensive way to get power is to build behind the meter. That's just, it's just more costly. So what large load companies do, whether it's Google Meta or any large industrial company in the US, they want to get on grid first and then they want to have backup power. So, you know, the hole behind the meter, I think was sort of in theory interesting, but the trouble is, it's very expensive because even though you put a generator out in the parking lot, you still need to buy another generator to back it up. In that generator is very, very expensive, much more expensive than connecting the grid. So hyperscalers and large load factories, the primary initiative is to get connected to the grid eventually, but in the near term, if they have to have power today, they might try to go behind the meter, but every company I speak to says, we wanna be on grid. So we've seen some very large behind the meter projects, like the one down in Abelene, there's one out in Wisconsin and Laramie. So there's three or four large ones in the US that are underway, but they haven't gotten remotely close to being completed. So I think the momentum for behind the meter, which is essentially bring your own power. I mean, theory sounded okay, but it has turned out to be not the first port of call for anyone who needs power today. The issue today, where I find the biggest opportunities for power are broadly speaking, if you need power, move out to Texas, move out to the Midwest, you need to go to places in the country where power is relatively cheaper, where there's more affordable land, where there's more affordable labor, and these are, in the electrification fund, we own equipment as well as utilities, our utility exposure is mostly in rural parts of the US. And those rural parts of the US, whether it's Idaho, which recently got micron as a customer. I mean, if you look at like Ida Corp, which is the Idaho utility company, and you looked at their power point, their biggest customers were like Idaho dairy and Chobani. Okay, and then if you look at over the last couple of years, you're now seeing micron as a customer, you see meta as a customer. So, you know, large loads, which are basically a buzzword for company that needs a ton of power, you know, rural parts of the US is where the investment opportunities are. And you know, look, the utility of old, like our parents utilities, these were the business model was three to five percent, or three to four percent dividend yield, and you kind of walked off and said, I've got a six percent full return. The utility of today, a regulated utility of today, is eight to nine percent EPS growth and three to four percent dividend yield. So you're looking at 12, 13 percent full return. You might go, yeah, but you know, I see that, you know, you just talked about 40 percent returns, you know, in other parts of, you know, manufacturing or hyper scale companies. The fact is utility companies now are signing large load customers off for 15 year contracts. So that eight to nine percent, you know, EPS growth and a three to four percent dividend yield, that's the duration of that promise is now 10 years out for some of these utility companies. I mean, next year energy, you know, which is the owner of Florida Power and Light, and also the owner of the largest power development company in the rest, like next year is just said, eight to nine percent EPS growth, plus four percent dividend yield out to 2035. Like they put that on a slide, okay? So like if you were an investor, as I said, you know, if you're gonna put your kids through school, if you know, 10 years down the road, you don't need to go out and buy Oak low or Nano or new scale. All these are kind of revenue lists, profit list businesses that basically use the word framework all the time, every time they announce a contract, framework, which means nothing. Like you can go out and buy an X-Tair, which is one of the most well capitalized, they just, you know, they just made a run at Dominion, you know, at Dominion. So next year is just gone from good to great because they just got access to data center Alley and on the East Coast. I think the deal goes through, because I think CEO of next year got kind of an eye going from the administration. And the PGM grid network, which is basically the whole mid-Atlantic part of the US is suffering right now from not enough power. You know, next year I didn't have access to that market, but will now that they're acquiring Dominion. So, you know, I think the administration has said, help us fix this, you know, so the new FB have nine networks, nine grid networks. And the most densely populated grid network in the US is something called PGM. It's a mess because it just didn't build enough power. And power prices have gone up 10X in the last 24 months. So again, this whole notion that electrification is, you know, nonsense. Like again, if they don't listen to this presentation, just go check the PGM power price auction that happened seven months ago where power prices went up 10X over a 12-month period. And that's price count. That would have gone up higher in how they not have the price counts in place. Price caps have caused there to be little generation made in this large network in the US. So, you know, they're short of power. And next year I just got access to it because Dominion is in the PGM, next year it isn't, but you know, the combined business now I think is better than it ever was previously and it's a holding in our fund. But again, you know, again small medium caps do play a role on the fund and you know, I don't know a company called Powell, we don't call it delfews. And you know, these are, these are mid cap type names, sub-tip billion dollar market companies. These are peer plays on very critical electrical pieces of equipment, whether it's industrial circuit breakers. So, Powell just to give you a quick on a drive-by-and-powell, their end-to-market was oil and gas platforms where they sold circuit breakers. You know, fast forward today, they're now confronted with not only oil and gas as being a customer base. And by the way, that entry has been sort of suffering for the last few years, but it is now beginning to pick up. But Powell now serves utility companies and for the first time, just announced a large data center or a last quarter. These small medium-sized companies, you know, that we service or that I service, these are businesses that are evolving over time. You know, these are business that used to serve equipment and make equipment for a certain industry that is, this equipment is now in demand by new industries that they haven't served in the past. And delfews is the same thing. Delfews is like a mini-anfinal. They make all the equipment that protects and connects power sources. So, all the connectors, that's what delfews does. They did it for the defense industry, but now they're doing it for the industrial sector. So, there are a lot of small and medium-sized businesses that are finding themselves kind of in the, kind of like at the, you know, at the epicenter of demand for their products that, you know, they haven't seen historically because utility industry hasn't been a customer or, you know, factory hasn't been a customer, but now their products are finding new market. So, you know, portfolio right now is about half large cap and half small medium. Yeah, I want to talk about what the grid, the future grid looks like. So, right now, depending upon who you ask, it's about 1.4 terawatts is what the grid can produce right now. And so, I guess looking out 5, 10 years, what do we need? And then the other question is, what are we going to get? Because there's what we need, and then there's what's actually doable with all of the regulation and community pushback. Certainly, there is pushback to some of these data center projects and the effect that they're possibly going to have on power prices for everyday consumers. And I think it's relevant to talk a little bit about SpaceX here. It was funny people have been talking about, oh, is it cheaper to do data centers in space? And there was an investor who said, guys, it's not about whether it's cheaper. It's about that he wants to put a terawatts. That's, you know, compare that to the grid of the United States and there's no regulation in space, right? So, if you need to build a terawatts of power, where can you do it and not have to deal with 50 state governments to get all of this done? And so, you know, my question is, is we clearly need more? Are we going to get it? The biggest impediments, and I get people say, oh, you know, Chris, I've missed the electrification investment opportunity. And my answer is, you haven't, for several reasons, is that the biggest pinch point in terms of the investment opportunity and the for electrification in the US is that we simply, the US simply does not have the resources necessary to essentially rebuild generation and rebuild grid. We just don't have the skilled labor to do it, thanks. This won't, you know, it took two and a half decades to essentially let our manufacturing footprint fall into tatters. It's taken two and a half to three decades and let our infrastructure for electrification basically fall into tatters. I mean, just step outside your front door and look down the street and see every utility pole that is like hanging in one direction and the other and ask yourself, is this the kind of infrastructure that is going to really support the modern economy? Like, our infrastructure in terms of electrification is is is is crime. And it needs to get fixed. It can't get fixed overnight because we don't have the skill set and labor source to do it quickly. The other big pinch point, though, is that the US needs where I'm looking for future opportunity in electrification is high voltage. The US needs a mammoth amount of reinvestment in high voltage and that what's that? That's 765 KV. So most of the-- high voltage, basically, when you look outside your car going down an interstate or a highway or through rural parts of the US, you see those sort of 10 stories tall lines. That's all high voltage. So high voltage power lines in the US is a sort of cottage segment that is, there are two companies exposed to it. It's Quanta, which is basically the designer and builder. They have the craft skilled labor. So like, you know, if you're a contractor, you can raise your hand and say, yeah, we can do that high voltage project. The issue is the virtually the only company that has their own labor force, where they can bring people onto the job right away and not subcontract. It's Quanta. The other big investment opportunity in high voltage in the US is American Electric Power, which is one of the country's largest utility companies that's regulated by AEP, which is a symbol. They have built like 85 to 90% of the high voltage going around the US. So there are some mammoth contracts and I've confirmed this with other companies that I've spoken to in the utility and in the electrical equipment sector. There are some mammoth high voltage contracts that are going to get awarded over the next couple of years. And there are, and those are two companies that investors can take a look at. So high voltage is an issue. The grid at the moment is you produce power in one place and you send it to the end user in the other place. It's one dimensional. The grid needs to get multi-dimensional. Meaning, you know, if people on the west coast are at 3M in the morning and they're not using power, that power needs to get back on grid and sent to the other parts of the US that are just waiting up. So our grid is not built like that. The grid essentially stopped getting modernized in the 1970s. So there's power available. Not necessarily the sticker number. It's the efficiency that the grid. Yeah, I tell my people in our company, it's the grid stupid. That's the issue. The grid isn't something where you can just dump tons of power on it and hope people use it. The grid is like, think of it like a scale. It needs to be balanced. What you're on, if you use a lot of power on one side, you need to be careful that you don't overuse, you need to make sure power is getting used on the other side. So the grid is a balancing, it's a balance and you can't just shove tons of power onto a system because you'll overload it and then the grid fails. And then you have to call it, you know, quanta and milk mount, fix it, and that helps to want his earnings. But data centers in space, okay. When that data center and satellite data center breaks down, who's going to go fix it? The humanoid. A Tesla robot, of course. And then the reshoring fund, you know, will perform well because Timkin is going to sell all the parts that go into those humanoids. But look, the issue with electrification is again, the grid is the biggest pinch point, not the generation. I mean, yes, you have to wait four years to get a gas turbine from, you know, from Vernova or from Zemens or from, you know, FTAI. Okay, you know, right again, right place, right time. There will be, you know, there will be a time period. So look, if you're going to build a $4 billion data center, okay, you're not calling up someone and say, you know what, sell us a 20-year-old, you know, engine that just got pulled off the wing of some, you know, 737. You're going to call someone who says we can give you a turbine. If your engineer walks into the data center and smells something the air that he doesn't like, and will sense a technician out there in 30 seconds to fix it. Okay, that's what a customer who is building a large factory or a data center needs. They want to see 500 pages of documentation. They want to see 500 pages of, of use case that shows the thing has a 99 point, you know, people are into the soul 39s, 49s, 99.99 uptime. They don't want to go out and buy some used aircraft engine that, you know, has essentially flown across the country 7,000 times. Okay, that might be a product where a small, medium, concise factory will take a chance on. But you need documentation, you need uptime guarantees, you need a company that will service it. Okay, and, you know, with Vernova, honestly, the most underappreciated component of the Vernova business is not that they have an $87 billion equivalent backlog, is that they have an $80 billion service backlog. Okay, so every one of those turbine comes with a 10-year service agreement. So, so the duration of the investment opportunity and electrification is growing in terms of scale. Number one, the projects are getting bigger in terms of gigawatts needed. And the duration of the projects is getting longer, meaning that the utility companies used to sign 7, 8, 9 year supply agreements to a factory. You know, Amazon just signed with NISORS, which is the, you know, big Indiana utility. They just signed up for 15-year contract. So, the duration of the earnings growth for regulated utilities just gets longer. Okay, and in the CapEx grows quarter after quarter. And the electrification opportunity, as I said, won't get fixed overnight because we just don't have the resources to fix it because it's been neglected for two and a half decades. And yeah, it's, this is a long-burn investment opportunity where the earnings estimates for equipment companies keep getting chased higher. I mean, if you sell equipment in a data center, if you're not growing 100%, you're probably losing share. I mean, you know, you looked at like each and last quarter. They had 240% growth in equipment that they sell into data centers. Okay, so if you're not growing rapidly, you're losing share. And in regular, you know, you don't have to go buy a merchant utility company. Emerge utility companies are companies that don't have end customers. They just sell power to the highest bidder, like this would be like town, district, constellation. These companies traded close to NVIDIA type multiples last year. Now it came crashing down. You know, look, you sell an electron's an electron, whether you buy it from a merchant company like constellation or you buy it from next year. It's the same electron, you know, you pay 20 times earnings for next year or pay 35 times for a constellation, who, by the way, hasn't announced a new data center in like nine months. You know, next era has, I mean, next era is basically Google's go to power developer. Yeah, regular YouTube is our great way for investors to get access to the electrification team without taking what call it value, high valuation risk. But again, there are small medium sized businesses out there that I think will change dramatically over the next few years because as it's a company like Powell that sells into oil and gas is now selling to utilities and now selling to data centers. Like there's a whole market opening up for that business that will that will mean it's earnings, you know, what double or triple over the next few years. I mean, even that company like caterpillar who going back to be showing for a minute, I mean, that company earns five and a half bucks a quarter. Okay, I think capital, I think caterpillar, I think companies capable of at least $10 a quarter by 2029. So that means earnings going from at 11 bucks to, sorry, that means earnings going from like $20 a share today to like 40 by 2029. And that's because all three of those their businesses are kicking in and growing. Again, extraordinarily well managed, great balance. She amazing service network. You know, I mean, if you're a second like lieutenant, you know, senior management at caterpillar, if you make that level, like, you know, they have some of the best managers in any manufacturing sector you're getting hired, you know, by other companies out there. But again, you know, these are garden variety, US industrial companies that I think, you know, people thought of as being cyclical, you know, whether it's industrial equipment or electrical equipment, the cycle's there. Still there. It's I don't think it's different this time, but they have this secular tailwind, you know, in terms of whether, you know, for for reuse manufacturing, the secular tailwind is just this trend towards making more things here in the US or electric patient, just reinvesting in our electric structure. So these secular, these secular tailwinds are now, yeah, supporting, you know, in terms of US manufacturing, you know, we're entering the early stages of the cycle, as well as having that secular demand driver behind. It is quite the secular story that we have here. Chris, we're going to have to have to wrap it up. People can find more information on the funds you manage as well as you publish some interesting insights and research on tmetf.com. Thank you so much for joining the show and looking forward to doing it again soon because these are both trends that are not going away anytime soon. All right, Max, thank you so much for having me and thanks for listening.