Transcript: Should You Invest In The UK Recovery?

Owain Bennallack is joined by Nate Weisshaar and Nathan Parmelee to discuss the country’s economic recovery.

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Suddenly the British economy looks like one of the strongest in the developed world, but is this recovery for real and how would the Motley Fool’s stock pickers buy into it? Regular host Owain Bennallack and fellow Fools Nate Weisshaar and Nathan Parmelee talk about this as well as Boston, Bob Diamond and the New Kids on the Block… naturally enough!

The following is an unedited transcript of this Fool podcast:

Owain Bennallack: Hello, and welcome to Money Talk, the investing roundtable from The Motley Fool. I’m Owain Bennallack, and with me today I have not one, but two of my American-twanged Motley Fool colleagues.

Yes, in a North versus South match-up, I have Nathan Parmelee, who’s dialling in from Boston U.S.A. — quite literally because we couldn’t actually get our ISDN call to him to work, so he’s footing the bill for this one!

While, sitting a couple of feet to my right, but originally hailing — I’m kind of guessing here — from the more southerly states of the U.S. of A., I have Nate Weisshaar. Nate, am I close? Are you from the south?

Nate Weisshaar: For you geographically challenged Brits, I’ll say that’s close enough.

Bennallack: Is it within 1,000 miles?

Weisshaar: Yes.

Bennallack: There you go. And Nathan, do you have a Bostonian accent? Because it sounds to me a bit like you do.

Nathan Parmelee: Most people actually say I don’t, but I do have a little bit of one. It depends on which words I use, I think; it comes out a little bit more. My wife says if I get excited or anxious about something, then it becomes much more obvious.

Bennallack: I guess the key is that you spend your time speaking to Bostonians, who can tell if you have a Bostonian accent, whereas I haven’t got a clue, really, what one sounds like, so probably I’m wrong.

Parmelee: That’s probably it.

Bennallack: Yes. Well anyway, it’s a good thing I’ve got you two Americans in the studio today, because I intend to talk all about the U.K. economy.

Wait, listeners! Come back!

I should stress at this point that Nate, the chap in the studio with me — it’s going to be confusing, the Nate/Nathan thing, but bear with us — Nate, who is in the studio, he has lived in London now for a couple of long, wet years, and both he and Nathan work exclusively for The Motley Fool’s U.K. Champion Shares Pro and Share Advisor services, so it’s fair to say they’re both up to their necks in U.K. plc, as much as anyone else.

Fair to say, Nate?

Weisshaar: I think that’s fair, and your classification of “wet years” is probably good, too.

Bennallack: Do you even remember what it’s like in America anymore?

Weisshaar: I’m still trying to reminisce about apple pies. I’m not even sure what that is.

Bennallack: Yeah. Have another Greggsnut, from Greggs. It’ll keep you (unclear)

Well, I’m going to talk — as we say, I’m going to quiz these guys — on the U.K.; U.K. plc and have we turned a corner? The evidence is gathering that we have turned the corner, so let’s hear it.

Then I want to look at a handful of companies that must be praying the worst is over; I’m thinking of the U.K. supermarkets that, in the main, had a truly dire Christmas, so what should investors do with these shares now?

And finally, what about Europe? Can we succeed when our biggest partner remains mired in crisis … or are things looking better in Europe too?

After all that we’ll, as usual, each reveal a share that we’re keeping an eye on right now, to explain what we see in it and what we’re looking out for. I want to introduce this in an American fashion, so I’m going to say, are we ready to rumble?

Weisshaar: We are.

Bennallack: That’s what you guys say, isn’t it?

Parmelee: Bring it on.

Weisshaar: We’re always ready to rumble.

Bennallack: Let’s rumble!

Well, after half a decade in the dumpster, it seems like the U.K. economy has finally gotten up, dusted itself down, and revealed there’s life in the old dog yet. In the space of about six months, we’ve gone from predictions of a triple-dip recession — remember that? — to talk of a roller coaster ride higher for growth and for jobs … for politicians, probably.

Nate, can you give us a taste of the data that has got people so excited recently?

Weisshaar: Well, it’s coming from a lot of sources; the ONS has upgraded its GDP numbers for the first and second quarter of last year; Q3 was strong. The IMF has raised its forecast for GDP growth for the U.K., while at the same time lowering its expectations for global growth, so the U.K. does look like a standout right now.

Bennallack: If the ONS has raised its last year’s figures, that means things weren’t as bad as they thought previously, as well as being better.

Weisshaar: Yes. Even the end of 2012 was better than we initially thought, so 2013 is shaping up to be, evidence that triple-dip was just headlines, rather than substance.

Bennallack: So now when I think back to the start of 2013, I should think happier thoughts, whatever it felt like?

Weisshaar: It was a better year than you even remember.

Bennallack: Yes. If I saw some people looking miserable, walking around, feeling that their pennies were being pinched, it was a figment of my imagination.

It was only a year ago of course, as we say, that economists and pundits were predicting the worst for Blighty, certainly for a couple of years. What has happened to change their mind? Did George Osborne just slip them a few tenners?

Weisshaar: Well, there may have been some of that but it has been five years, so some improvement should have been seen by now, and it’s starting to come around; part of that coming from banks starting to lend a little bit more. The Help to Buy scheme obviously boosted mortgage lending, which is helping boost house prices, which were up 8% last year, which is good if you’re a homeowner.

Bennallack: You’re aware that I’m not currently a homeowner, aren’t you?

Weisshaar: I know. I was kind of aiming at that.

Bennallack: Cheers, Nate!

Weisshaar: It’s essentially about time. We need to see this happen, and I think the only box that needs to be ticked is we need to see wages start to grow faster than inflation so that consumers aren’t feeling as pinched as they have been.

Bennallack: It’s interesting, though — just to follow up on that point — obviously wage growth has been slow, but equally I think I’m right in saying that there’s now more people employed in the U.K. than ever before, because we’ve had more people come into the workforce. So whilst a person in the street might not feel so wealthy, for U.K. plc it’s probably not so bad.

Weisshaar: It depends how you want to slice the numbers.  A lot of the new employment is people who have become self-employed out of necessity, so for better or worse they are starting up their own businesses, which may or may not be profitable, but it’s just what they have to do. Those numbers can be seen as encouraging, but they aren’t exactly a clear picture, to me anyway.

Bennallack: Nathan, let’s say that you, gazing over from Boston, see this situation that we’re in. Do you see the strength? You think it’s going to persist? Feel free to tell me if you don’t think it’s going to, but let’s say you do.

What sort of companies would you go and invest in, to try and benefit from this strength? Because of course people should realise that most of the big U.K. names — BP, Unilever, those sorts of companies — they make the bulk of their sales overseas, right?

Parmelee: Yes, they do, and actually I like that. I think that’s a positive; to have that diversification geographically and be able to get sales from all over the world, I think is a great thing about the U.K. market, so I wouldn’t overlook those names entirely.

But if I wanted to dig in and focus on the more U.K.-focused companies — U.K. plc — I would look more towards the REITs. I’m going to agree with you, actually, and say that I do think the recovery is going in the right direction.

Bennallack: Go, us!

Parmelee: I would go with the REITs, particularly the commercial and industrial REITs, because I think they have room to raise rents still, and activity is picking up for their properties, which is always good news as far as the valuations go.

Bennallack: For people who don’t know, REITs are property investment vehicles, effectively.

Parmelee: Yes, and the nice factor there is, depending on where you hold the shares, you may not have to pay any taxes on the dividend, but that’s probably another subject for another day.

Another group of companies that I like are the materials companies. I like them because, really, the valuations are good. There’s a number of them in the U.K. that are well-managed, and I think there’s a good opportunity there as the economy recovers. It benefits from the U.K. recovery, and elsewhere.

Bennallack: I was just going to say that you haven’t mentioned U.K. banks, like the likes of Lloyds. Would you not think that they would be a reasonable play on the U.K. economy?

Parmelee: They may be a reasonable play; I’m just not a bank guy. I don’t like digging through their balance sheets. I find them opaque and difficult. There are 10 other things I’d rather do with my time, at least, than dig through bank balance sheets to determine if there’s value there or not.

Bennallack: Most people can’t bear to look at their own bank statements, so I don’t blame you. Nate, what about you? What are your views on Lloyds, while we’re talking about it?

Weisshaar: I think, of the U.K.-specific banks, Lloyds is in a much better position than, say, RBS.

Bennallack: Lloyds is the most domestically-focussed, I would have thought.

Weisshaar: Yes. RBS is also trying to shrink itself down to be as simple as possible, because obviously they couldn’t handle being more complex.

Bennallack: They’re trying to get Nathan to invest in them.

Parmelee: Not going to happen.

Weisshaar: If that’s your target — if you’re trying to capitalise on the U.K. — then Lloyds is a pretty good focused play on it. However, I think the shares aren’t quite as attractive as they were, even a year ago. They had quite a run, and I would probably look elsewhere for the best opportunities.

Bennallack: Another set of companies that weren’t mentioned were the U.K. supermarkets. I’m think of Tesco, Sainsbury, MorrisonAsda some people might think of as a U.K. supermarket, but of course that’s owned by you guys; U.S. giant, Wal-Mart.

Nate, the managers of these companies must have been very naughty boys and girls, because they definitely didn’t get what they wanted for Christmas, did they?

Weisshaar: I assume they didn’t, because I assume they were looking for a little bit of growth, and pretty much none of them got that. Sainsbury’s, however, did hold onto their streak of nine years of like-for-like growth, by a hair, with 0.2%.

Bennallack: Woah. I think that almost deserves a faint round of applause. Here it comes … Faint round of applause there.

Weisshaar: Very faint. It may be a technicality, but it lets them keep their streak alive, and it’s significantly better than what we saw at Tesco, who saw their like-for-likes fall 2.5%, and Morrisons fell over 5%, so even a hair is much better than what we’re seeing there.

Bennallack: Yes, minus five. What on earth went wrong? My mum seems to do her bit. I went down there to visit her for Christmas, and I couldn’t actually get into the kitchen. I bought all my presents online and I delivered them to her house for my various assorting siblings. Do you think that’s part of the picture?

Weisshaar: That’s definitely part of the picture. Online shopping was the thing this year; iPads, mobile phones — even desktop computers, for those people who still use those.

Bennallack: That’s the thing. I do my online shopping, now, lying down with my iPad. I don’t even have to sit up.

Weisshaar: The consumer economy is becoming simpler and simpler. But yes, online really did hit these guys — not just the grocers, but all retail.

The big issue here is, even if you have an online presence, if more people are shopping online rather than coming into your stores, those stores still cost you money because you have to staff them. You have to keep the lights on. And if you weren’t anticipating such a low traffic flow, then you probably overstaffed and probably had more inventory than was necessary, so those cost centres are dragging on these retailers of all sorts.

Bennallack: Nathan, you keep your eye on U.K. retail, I know, perhaps a bit more on the clothing and merchandise side of things. How did you see Christmas?

Parmelee: Actually, very mixed. Definitely better than the grocers, but not great. I would say the companies that either have brands or have built strong relationships with their customers — say Ted Baker, Next, and even though it’s private, John Lewis — they all did relatively well, or even great. They didn’t really have to discount either, and avoided discounting, which is to their credit.

On the other side of the ledger are companies like Debenhams, which really just seems to focus on turning inventory lately, then Marks & Spencer, which ironically is turning into a great grocer, but just seems to sell some undergarments on the side and doesn’t really do too well at it.

Bennallack: Maybe they need to mix that up. Maybe they need to sell the undergarments in amongst the frozen food.

Weisshaar: I’m not sure that that’s where you want to go with that one.

Bennallack: Actually the frozen food, maybe it would have to be more gloves and scarves.

Weisshaar: There you go.

Bennallack: If you were an investor looking at this sector, Nathan, would you consider that looking for the companies with stronger brands is going to persist, or are the other companies now so beaten up that maybe there’s some value there?

Parmelee: A little bit of both.

For the first group, the ones that are doing well, I would wait for them to stumble. Wait for a little bit of panic to build up there, that they’re not going to meet their numbers or something like that. Just make sure that they’re still maintaining that relationship, and building the brands; then any short-term worries are an opportunity, I think.

In the other group, I think you want to wait until you see a strategy change or a management change, before you get interested in them. Without either of those, or both, I think you want to stay away.

Bennallack: It is definitely a graveyard of investing theses, the retail sector.

To wrap this up, since we’re on sort of a macroeconomic theme this week, let’s be good Europeans — like you guys don’t even need to pretend to be and, as a Brit, I can’t really convincingly fake — but let’s do it. Let’s look over the Channel to Europe.

Nathan, I had a feeling that you and I may have had an intellectually stimulating disagreement, shall we say, about this. Apparently not; apparently, you are also seeing some signs of green shoots in Europe.

Parmelee: I’m seeing some good signs. I’m not enamoured with Europe and the opportunities there, but I am seeing some signs. I’m not as negative as I was.

Germany started to look a little soft. Their third quarter GDP report was weaker than the second quarter, but then they’ve had really strong factory orders lately, so it looks like they might be picking up again. Apparently everybody wants their BMWs and Mercedes.

Then I’ve been particularly impressed with Spain, and how the labour reforms and some of the other reforms put in place last year are really starting to take hold, and things are turning around there.

There are pockets of strength; I would say Germany, Spain, even Ireland. Outside, you have Sweden doing well. But then weakness is still there, particularly in France, which has probably taken a step backward in the last year or two in economic policy and some of those things they’ve done.

Bennallack: I don’t know whether you’ve been keeping up with the news, Nathan, but France has taken a step forward because the President is allegedly having an affair! I mean, what do you want out of France, but that kind of bedroom farce?

Parmelee: That’s true. At least they’re keeping it interesting, while they’re sliding down.

Bennallack: Exactly. Maybe he’ll have to distract people with some sensible economic policies. Personally, I agree. I think Spain and Germany are the bright spots, but France is obviously still TBC.

But overall I guess it looks like we’re bumping along the bottom. Europe definitely still has problems, but I’ve always maintained to the more pessimistic that Europeans are rich, and I don’t think the economic cycle has been abolished, so I think eventually things will improve.

I think we are seeing some of that abatement of panic in, for instance, the fixed income market, where a couple of years ago the bond yields really ballooned out for Spain and Italy. They had to pay a lot more to borrow than Germany or — at the time — France, before the Nathan Parmelee verdict was confidently given, and France was still thought of as a strong country.

What do you think the compression of yields — those countries’ borrowing costs coming in line with the core — means? Do you think that’s a sign of returning confidence, or do you think it’s maybe a bit illusory?

Parmelee: I think it’s more a sign of confidence.

Now, whether that confidence is as warranted as it is, is a whole other question. But, Portugal talking that they may return to the bond market soon, which would be a good thing for them; Italy, like you said, is a wealthy country — if you can get them to pay their taxes, then you could support their bonds; and then Spain, which we talked about already, is starting to recover, so I would say the confidence there is probably more warranted.

Bennallack: Nate, I’m looking across at you, and you’re looking angry. You’re clenching your fists. I think you’re biting your tongue, because there’s blood dribbling down your chin. I’m sensing that you’re not on board with this pretty tentative consensus that Europe is getting a bit better.

Weisshaar: Yeah, I’ll play the pessimist here. I just can’t grasp this “recovery,” as people are calling it. The problems that put Europe where it is have not been addressed. While, yes, confidence is recovering, confidence is a fickle beast, so if we see any of the issues with the banks stumbling, if we see signs that turnarounds in some of these periphery countries — or even if France gets worse — I think confidence can go out the window pretty quickly.

Greece today is suffering a multi-year, even worse than a recession — it possibly could be called a depression — and they’re still seeing deflationary forces there, which means it’s going to be harder and harder for them to be paying back the debt that is ballooning.

Bennallack: You were mentioning to me there’s been a lot of emigration out of some of those countries, as well.

Weisshaar: That’s a big concern, at least if you’re looking longer term, is youth unemployment throughout the periphery of Europe. We’ve got 20% youth unemployment in Spain which, the numbers may be coming down, but they may also just be reflecting the fact that youth from Spain are leaving Spain to go work in Germany or wherever they can get a job.

The big problem, I think, is that this isn’t just unskilled labour leaving. This is young, intelligent, educated Spaniards, going abroad in order to get money for their education and their brains, and that means there’s going to be a vacuum in Spain, if there is a recovery forming.

Bennallack: Isn’t this kind of the common labour market, working? Isn’t this what we need, to have a proper European Union?

Weisshaar: I think it illustrates the benefit of a common market, but until Spain has something to attract these people back, the Spanish economy isn’t exactly going to be robust, in my mind. It could turn into a great low-cost manufacturing hub, if labour prices come down far enough, but is that exactly a “robust” economy?

Bennallack: I think me and Nathan have — well, maybe we’ve all got them out of the emergency room — but it sounds like, in your worldview, they’re still hooked up to life support down the corridor.

Well, we always end each podcast with a run-through of three shares that are on our individual radars. They might be shares in the news, they might be shares with results out. They may be shares that just look a bit cheap for unfathomably unfair reasons. That’s usually my share, and I usually practice before trying to say “unfathomably unfair.”

Nathan, as you’re the “new kid on the block” — to quote the amazing American popstrels — would you care to go first?

Parmelee: They were actually from Boston, by the way. I just thought I’d throw that out there.

Bennallack: Are they?

Parmelee: Yes.

Bennallack: Do they have Bostonian accents?

Parmelee: Yes, much better than mine; much more impressive. Our new Mayor is straight out of a cartoon or something.

Bennallack: I think we need to, in a future podcast, hear you knocking out a couple of their famous tunes. I can’t actually … do they have any famous tunes?

Weisshaar: They did. I don’t know if they still do. Although I did see that they were touring recently.

Bennallack: Fickle fame. OK, let’s crack on to stuff we know more about.

Parmelee: Yes. I talked about materials looking good earlier, and we’ve been talking about Europe, so I’m going to go with Croda, the U.K. specialty chemicals company. A really great business, really great margins and, if anything, last year they struggled a little bit because Europe was soft.

Based on the valuation, they don’t need Europe to do well, I don’t think, but if Europe does do well, I think you’re getting a bargain here.

Weisshaar: My biggest question, any time we talk about a materials company is that this is broadly a commodity industry. It doesn’t take a whole lot to — it’s not a simple process, but it’s very replicable — so what sets a Croda apart? How are they going to be able to maintain these very impressive margins that we’ve seen in the last couple of years?

Parmelee: Part of their business model is making an individual, unique product for each customer. It’ll be possible for some of their customers to go out and work with a competitor and displace them, but there’s not direct, off-the-shelf products in a lot of cases now, that customers can compare and then compete on price and push Croda out. They’d have to work with somebody and innovate to displace a lot of their revenue.

Bennallack: So they’re not the sort of company — because we’re hearing a lot about how shale gas in the U.S. is going to make a lot of chemical production go back to the U.S. —  but that would be for the big volume plays, where energy prices are a key component. I’m getting the impression that Croda are further up the value chain.

Parmelee: Correct. For Croda, it would be great if they could have lower energy prices; that would help them out, but it’s not as important to them. They’re shipping things that go, say, by post overnight, more so than things that go in tankers by rail, or over the seas.

Bennallack: Oh, wow. OK, that sounds worth looking into. Nate, what have you brought to the round table this week?

Weisshaar: I’ve brought an interesting little one. The company’s called Atlas Mara and it is a partnership, essentially, between Bob Diamond — who you may recall was previously in charge of Barclays

Bennallack: You realise someone just threw something at their radio.

Weisshaar: Fortunately, I’m safe in the studio.

Bob Diamond is teaming up with an African entrepreneur named Ashish Thakkar. They’ve raised a little over £300 million in the London market. They’re going to use that cash to buy another company; an unnamed company, but presumably it will be in the financial industry, because what they’re trying to do is become a lender to entrepreneurs throughout Africa.

It’s an interesting, if not fully-developed, way for investors to tap into one of the bigger growth avenues in one of the remaining major growth markets in the world.

Bennallack: It also sounds a bit like the plot of an Indiana Jones movie. You’ve got Bob Diamond, who’s always had an exciting name, Atlas Mara, into Africa …

At the moment, the company’s just a cash shell, though, isn’t it? They’ve effectively raised cash, and you can go and buy a share of that cash and where it goes. I guess my question would be, would it be better to buy now and hope they do something good with it, or would it be better to wait until you see what they use the cash for, and then take a view on that company?

Weisshaar: I think it depends on you, as an investor, really. If you have convictions that you think Africa is a place you want to be putting your money, I think you could do much worse than working with Bob Diamond and Mr. Thakkar, because they both have incredible networks of connections throughout Africa. Mr. Thakkar actually has a couple of foundations that he’s set up to help mentor young African entrepreneurs, so you’ve got a pipeline of opportunities, right there.

Bennallack: Well, andI would even say Bob Diamond — obviously not the flavour of the month for most people — but he seems to be pretty good at making money, so if he got booted out of Barclays at the height of his powers, then potentially he’s going to deliver here.

Weisshaar: Yes. Some people may not remember this, but he was responsible for building up a large portion of Barclays’ African business, so he is familiar with the region and he’s got connections.

I think if you are a bit less risk-averse, willing to take on more risk, getting in early is probably better because there are some dilution aspects to this so if you get in early, the pain will be possibly less, if they pull this off correctly.

Bennallack: I think that sounds very interesting. Nathan, do you have any quick thoughts?

Parmelee: Yes, I was going to say — I probably shouldn’t jump in and say this — but Bob Diamond? Also from Boston.

Bennallack: It’s the Boston mafia. Well we’ll have to get double helpings of them, then. We’ll all buy those.

As always, last and least is yours truly. I was tempted to go for a supermarket, as I think they’re all locked up in the clink — that’s American for gaol, I believe — that things can’t get too much worse.

But instead, I am wondering if it’s time to look again at Shell. I don’t really have a very complicated thesis here. I just think the shares look cheap. I think the P/E is about 9.5, just under 10. The dividend yield is over 5%, price to book not particularly elevated by their standards, but key to my extremely focused, shall we say, thesis about Shell is that they’re buying back a lot of shares.

This year alone, they’ve bought back — in fact, yesterday alone; Friday, I think it was — they bought back nearly half a million shares. Day before that, just over half a million, day before that, over half a million … 

Parmelee: Wow.

Bennallack: Day before that, over half a million.

They had a break over Christmas, but up until December 17 they were also buying back shares. I don’t actually always like to see buy-backs, because I think it’s just a good way for management to not bother to find ways to expand the company, in some cases, but when a company is this cheap, even just buying back the shares and not having to pay out the 5% dividend yield, it’s 5% in the bag there, let alone the growth that hopefully is to come.

I think that, while the shares are cheap and they’re buying them back you can buy this, sit on them, get your dividend yield, and if the shares re-rate then you can take a view on whether the prospects warrant it or not.

Parmelee: I’ll say I like the valuation, I like the dividend yield and the buy-backs even, in this case. The one concern I have, and I’d like to hear what you think, is Shell’s ability to replace their reserves as they produce them and sell them off around the world.

Bennallack: Yes, I think it is a very legitimate concern. Like a lot of the majors, they haven’t had a great record recently of having over 100% replacement rates, so I guess they have been shrinking.

But I think in the current climate, what the rating of this company is telling you is that investors don’t really want them to go round doing any more risky exploration and prospecting at the moment, for whatever reason. Maybe they’re anticipating that there’s lots of supply coming online; maybe it’s the shift to gas, where I think actually Shell has positioned itself recently much more into gas.

I haven’t done a spreadsheet. I bet you could even possibly do a spreadsheet and see the reserves go to nothing, and work out what your return would be, and it might even be pretty good if it just ate itself over the next 30 years.

But I was just going to say, just at this rating, I don’t really mind the reserves not being topped up right now.

Parmelee: Do you think they might do something like Exxon, go out and acquire those reserves when they can? Try to get them cheap?

Bennallack: As you know, the E&P sector has been beaten up a bit, so the longer that goes on, the more there must be some reserves coming available at decent prices, but the problem with these companies is they’re so vast. Shell is £142 billion, so a very limited number of companies are going to move the dial.

I have shares in SoCo, which I consider ripe for acquisition by someone, but that’s not going to go for more than a billion or two, and that’s just a blip for Shell.

I think if it were sitting here on a P/E of, say 14, and a yield of 4%, and maybe if it was still buying back shares, I’d want to know why was it so confident that it was going to have a really long-run sustainable business. But at the moment I don’t think it’s really being priced for that, and I think it’s what shareholders want at the moment.

Nate, you’ve spoken about Shell a bit.

Weisshaar: Yes. I think it’s an interesting conundrum for investors. The question, as you point out, is does the company invest in its future, or does it sit on its reserves and essentially go into runoff?

The question becomes, do you sacrifice the future growth of the company — the capex that’s required in order to grow or acquire reserves — in order to reduce your risk, as some shareholders are saying, and just return the cash to the owners? I think it depends on your point of view, as to the direction of the energy market, renewables, and whether returns can be achieved on these deep sea and other risky …

Bennallack: That’s the thing; they’re all risky. This is a safe way of getting a return.

Nathan, I have a question for you, which is that the company’s called Royal Dutch Shell. Royal Dutch Shell — so Royal, British; Dutch, I’m sensing Dutch influence there; Shell, the land of the mermaids and the seahorses — surely this company doesn’t come from Boston.

Parmelee: No, no. But, The Hague is a wonderful city. I think we should make a research trip.

Bennallack: We’ll see if Bob Diamond can come along. Maybe the New Kids on the Block concert will be taking place in The Hague.

Weisshaar: There we go.

Bennallack: We can dovetail everything together.

All right, I’m going to call it a day there. Thanks for dialling in, Nathan.

Parmelee: No problem; happy to be here any time.

Bennallack: Thanks for not resisting when I forced you from your desk, Nate.

Weisshaar: Well, that was a less pleasant experience.

Bennallack: We will speak to you all in a couple of weeks.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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